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Brazil Instants Games- Breaking out of the Poverty Trap Miami, October 25 th 2012.

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Presentation on theme: "Brazil Instants Games- Breaking out of the Poverty Trap Miami, October 25 th 2012."— Presentation transcript:

1 Brazil Instants Games- Breaking out of the Poverty Trap Miami, October 25 th 2012

2 Regulatory Framework Caixa Economica Federal Operates the National Lottery Some States are entitled to have their own lotteries (Decree of 1967). The state lottery of Rio de Janeiro has outsourced its operation, with active oversight Hebara runs Passive and Instant Games for the state of Rio de Janeiro

3 Sales Source: La Fleur, IMF, Caixa, Hebara JURISDICTIONPOPGDPGDP PCSALESPC SALES (MM)(Billion)$($ MM)$ PUERTO RICO49 26.58872 18,00 TRINIDAD1,322 17.06017 13,08 ST LUCIA0,21 7.3791 5,00 NICARÁGUA5,87 1.23915 2,59 RIO DE JANEIRO16199 12.42333 2,06 COSTA RICA4,740 8.8749 1,91 CHILE17,1243 14.40330 1,75 MEXICO113,41185 10.146195 1,72 DOMINICAN REPUBLIC9,954 5.54516 1,62 ECUADOR14,565 4.42820 1,38 JAMAICA2,715 5.2672 0,74 EL SALVADOR6,223 3.8554 0,65 ARGENTINA40,4435 10.95925 0,62 URUGUAY3,449 13.8662 0,59 BRAZIL1905469 12.789104 0,55 PERU29169 5.9048 0,28

4 Latam vs Top 25


6 Poverty Trap Low Payout Few winning experiences Low attractiveness For consumer Low demand/sales Low attractiveness for retailer High percentage comission High percentage return to stakeholders LOW RETURN TO STAKEHOLDERS

7 Best Practices 1.Price Points 2.Prize Payout 3.Prizes 4.Distribution 5.Branding

8 Turn Around – Jan 2011 Collaborated with law makers showing the need to make regulatory changes to allow for an increase in payout Increased payout from 50% to 56% Increased number of retailers by 50% Introduced R$2,00 and R$ 3,00 price points Introduced new prizes to appeal to different consumers Initiated Marketing Campaign – Branding

9 Sales Performance – Jan 2011 to Aug 2012 104% Increase

10 Challenge Need to Increase Sales Still Further

11 Growth Cycle High Payout More winning experiences Enhance Brand Perception Higher price points Appeal to broader consumer base High Sales High return to stakeholders HIGH RETURN TO LOTTERY BENEFICIARIES

12 Higher Price Points – US Market Source: La Fleurs

13 Higher Price Points – Italy Italy Source: Scientific Games


15 Expansion Plan 2012 Reduce retailer comission from 15% to 10% o Guarantee minimum nominal average of last 3 months Increase payout to up to 70% (63% avg) Introduce TBVS based on mobile technology for ticket activation/validation Introduce consignment Implement a bigger product mix Introduce R$ 5,00 ticket with 70% payout Introduce new game mechanics

16 Payouts vs Sales – US examples




20 Sales Projections

21 Thank You!

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