10/28/2023 – 9:50
The partnership between the Santa Casa da Misericórdia of Lisbon (SCML), from Portugal, and the Bank of Brasilia (BRB). The objective of the business, announced in April, was the creation of a lottery at the Federal District, which would be explored together. However, with the change in command of the Portuguese company, in May, and the carrying out of an audit, conducted by BDO, the contract has now been cancelled.
One of the reasons given by the new management for ending the partnership was the complex corporate network found in Brazil to explore the lottery. Set up from Santa Casa Global (SCG), an arm of SCML created to explore lotteries outside Portugal, it was made up of five companies and eleven partners, and was defined as “confusing” by Ana Jorge, the new president.
Another point of attention raised was the overrun of the original budget. The company’s internationalization project, which began around three years ago, included investments of 5 million euros. However, by the end of the contract with BRB, around 27 million euros had already been transferred to the country.
According to the newspaper Público, which broke the story in Portugal, SCML sent representatives to Brazil to regain control of the companies and find out how the money was spent. There is a suspicion that the amount invested could be even higher.
The cue to cancel the deal, free of charge, was a determination by the Federal District Court of Auditors (TCDF). The body questioned BRB’s competence to explore social games and lotteries. I also wanted to know more about the formal procedures of the entire process, according to Público. As the process extended, the contractual deadlines for obtaining the necessary authorizations elapsed, and the Portuguese company’s lawyers took the opportunity to cancel the deal.
The company created to run the lottery in the Federal District is called BRB Lotteries. Its majority shareholder is BRB, with 50.1% of the share capital. According to Público, the remaining 49.9% belongs to SCG Holding, a company that, in turn, is controlled by SCG Portugal, owner of 80.1% of the share capital.
The deal with BRB is not SCML’s only one in the country. The company already operated in Rio de Janeiro and São Paulo. In Rio de Janeiro, in partnership with Loterias do Rio de Janeiro (Loterj). In São Paulo, as a partner at Santa Casa de Capitalização. In both cases, the outlook is also negative.
According to Público, a report on SCG, received in April, points out that, in addition to the corporate tangle and signs of possible fraud in the business in Rio de Janeiro, competition with new types of online gambling also compromises profitability. With the change in gaming habits, reinforced by the intense marketing of digital companies, sports betting is gaining ground, to the detriment of the type of bet offered by companies of which SCG is a partner.
In a note, BRB states that the selection of the international partner for the development of the project was made through a “competitive process”. According to the Brazilian institution, negotiations are still ongoing, “with a view to finding an appropriate solution for the partnership”.
#Portuguese #company #ends #contract #BRB #lottery