Hebara CEO Amilton Noble: Brazil’s lottery sector needs certainty, competition and speed

You’ve seen the Brazilian lottery sector evolve through multiple legal and commercial cycles. How does the Supreme Court’s decision on municipal lotteries can change the direction of that evolution?

The market needs legal certainty. And looking at it from this perspective, the Supreme Court's decision, even if still provisional and preliminary, provides some direction.

In my view, and I have stated this numerous times, municipalities need to be included in discussions related to lotteries, whether operating them or cooperating in some way, just as they should directly benefit from the resources collected at the federal and state levels. 

The operations take place in the municipalities and they are not directly benefited by the resources allocated to them. This is a distortion that municipal lotteries would resolve, but which the Supreme Court, for now, has deemed unconstitutional.

The ruling brought an abrupt halt to dozens of local initiatives across the country. In your view, does this decision bring clarity to the sector  or simply shift uncertainty to another level?

This certainly created some instability for those who had already begun their operational processes or model selection. But a concrete definition was necessary to avoid greater disruptions in the future.

Hebara operated lotteries in Rio de Janeiro with profound legal uncertainty, given that the Federal Government always had a monopolistic vision. This was overcome by the Supreme Federal Court's decision in ADPFs 492 and 493, which also sparked the discussion about municipal lotteries. This uncertainty was very harmful, as it hindered investments and the modernization of products and services over the years.

Today we have a much clearer scenario. And this is fundamental for a lottery operation.

What is lost and what might actually be protected by concentrating lottery authority at the state level, considering municipal lotteries were often framed as tools for regional development?

Decentralizing decision-making is beneficial, especially for bettors, who will see a level of competition that will bring immediate benefits, such as increased payouts. 

The Union's almost monopolistic role in prediction products creates a certain comfort zone that leads to rigid management. 

Just look at Caixa Loterias' product portfolio. They haven't launched a single product in almost 3 years. And the last successful product was launched in 2005, more than 20 years ago. This wouldn't have happened if we had a level of competition that reached municipal regulation levels.

You’ve helped build some of the most successful lottery products in Brazil, but, looking ahead, what conditions are essential for innovation to survive in the current regulatory model?

It's very important to look back not only to see what went right, but also to understand that the world has changed. The secret is to combine what is successful in the physical world with new technologies and the dynamism of the digital world. 

Those who know how to adapt to these two realities will be successful.

Simply replicating what worked in the past is no guarantee of success today. Similarly, launching modern products that are disconnected from Brazilian culture is not the way to go. The balance between these two aspects will indicate which products will be well-received by consumers, especially the younger generations.

How do you think this ruling will impact the way Brazilians interact with lottery products in practice?

Certainly, the dynamism that a municipal lottery would bring would cause the operators of these lotteries to launch more modern products and expand their portfolio more quickly and boldly. 

State structures are slower to make these launches. As for the Federal Government, through Caixa Loterias, it's even worse, as it's a very heavy and complex structure, tending to make small and always very slow moves. In short, we will lose agility.

If this Supreme Court decision becomes a definitive turning point, what do you believe regulators and industry players must do next to avoid fragmentation and protect the sector’s long-term credibility?

Even if it's not definitive, the sector needs to understand and act as if it were. We can't generate expectations while waiting for a judicial decision that could take years. 

Therefore, other regulatory bodies need to fill this gap quickly and give due focus to all lottery modalities foreseen by law. What we have seen is an excessive focus, mainly from SPA, on fixed-odds betting. 

These are very important today, but we cannot leave the other lottery modalities to chance. They represent great opportunities for growth in a sector that is crying out for attention.

How can the sector adapt pragmatically while waiting for clearer institutional definitions?

The gaming and betting market thrives on credibility and constant innovation. We haven't seen that here, with rare exceptions.

Fixed-odds betting has confirmed what I'm saying. New games are launched every day. High payouts and a focus on the bettor. The result is continuous growth.

And conversely, we have traditional lotteries stagnating or experiencing only organic growth.

Considering your experience with state-level lottery success stories, do you believe this ruling could ultimately push states to modernise their lottery models or it’s more likely to risk stagnation?

We need to be pragmatic. The Supreme Federal Court ruled on the right of states to operate their lotteries in September 2020, that is, more than 5 years ago. And so far we have no more than 10 states operating or preparing to operate. This is a clear reflection of the opportunities that are being missed. And the year that is now beginning, due to the electoral calendar, tends not to bring many new developments regarding the launch of new state lotteries.

And that is where my bewilderment lies regarding some states, such as Santa Catarina, for example, which have not made consistent moves to operate their lotteries directly, and have filed an Amicus Curiae brief in ADPF 1212, arguing that municipalities should not operate. I dream of one day seeing all 26 states and the Federal District with their lotteries active and thriving. I will work to make that happen.

If the Supreme Federal Court (STF) ever decides that municipalities also have a duty to regulate lotteries, I will be ready to collaborate by providing information on best practices for structuring a lottery that focuses on bettors. By focusing on the bettor, success will be guaranteed.