Brazil's state-owned bank Caixa has delayed the launch of its gambling business due to political pressure, highlighting contradictions in Brazil's regulatory system and sparking widespread discussion about market competition and the bank's potential. Experts note that the delay could affect the stability of the regulated market, and although Caixa has a brand advantage, it may not become a market leader.
Political Pressure and Delayed Launch
After obtaining authorization to operate online gambling, Caixa originally planned to launch its gambling products in November, but faced criticism from Senator Damaris Alves, who called the plan "contradictory and dangerous." Following intervention by President Lula, the bank decided to postpone the launch without announcing a new date. Bank president Carlos Vieira had estimated that the business could generate revenue of 2 to 2.5 billion reais by 2026.
Regulatory Contradictions and Competition Concerns
The delay by Caixa has raised questions about the regulatory system, with the government being accused of preventing state entities from entering the legal market. Expert Ramiro Atucha warned that increased taxes and political debates could undermine the regulated market, instead strengthening unlicensed operators. Additionally, the participation of state banks in the market raises concerns about fair competition, as Vieira supports increasing tax rates, contrary to industry opinions.
Market Potential and Financial Prospects
Despite Caixa's monopoly on lotteries and brand trust, Ed Birkin from H2 Gambling Capital believes it is unlikely to become a top operator, estimating a market share cap of 7.5%. However, Caixa can leverage its existing lottery network and database to reduce marketing costs and achieve profitability. Birkin noted that even with a smaller share, the financial prospects are still attractive.
