Lotteries in Buenos Aires restarted their operations in mid-July, as the country moved towards a new lockdown phase. However, although some restrictions have been lifted, post-lockdown figures are yet to offset the losses suffered by agencies in the period where they were unable to operate.
Currently, agencies in the City of Buenos Aires are considered gambling operators, under the same category as casinos and bingos. The 1.278 agencies in the country’s capital cannot access government benefits or credits. The Chamber of Official Lottery Agencies of the City of Buenos Aires (CAOLBA), along with the official Chamber from the province (CAOLAB), requested the national government to consider agencies as medium-sized companies (SMEs).
Diego D’Agostino, president of CAOLBA, explained to Lottery Daily that they still haven’t received an answer on the recategorisation from the SMEs Secretary of the Ministry of Productive Development.
Lottery Daily: CAOLBA asked the state to include the lottery sector as a beneficiary to access loans at a 12% interest rate, just like SMEs. Do you plan to continue this request once operations are normalized?
DD: Of course, we want to consider all possible actions in pursuit of this goal because we are wrongly categorised. It’s unfair, we’re not gambling operators. At AFIP (national taxing agency), we’re under a code that doesn’t represent us. Being in the SMEs category has a lot of benefits, not only credits, and we cannot access any of them.
Lottery Daily: How was the dynamic with the regulator LOTBA to be able to request the SME consideration?
DD: We were in touch with LOTBA through notes and videoconferences. They collaborated with us, along with the Association of State Lotteries (ALEA), to make a statement acknowledging that the agencies are not gambling operators.
Lottery Daily: When the city backtracked the reopening process, the city had 1278 agencies. Has any of them shut down? Do you have a plan B in case the City decides to go back to phase 1 again?
DD: A few agencies didn’t return to their usual activities, some because the reopening is not mandatory, others because they’re located inside galleries, which is prohibited, or in non-authorized areas.
We don’t know if LOTBA has put together a plan B, but so far the Chief of Government Horacio Rodríguez Larreta aims to maintain this phase 3. But we have not been informed about it.
Lottery Daily: Between May 14 and July 1, agencies registered less than 30% of what they usually make. Do you think it’s possible to increase that number in the remaining months of 2020?
DD: We hope that, as we advance in the reopening process, we can recover. It will be very, very difficult: there are fewer people circulating in the city, maybe in some neighborhoods there’s more traffic. But it’s very apocalyptic, because state employees, the Judiciary, offices and schools are not open. So we’re very affected by that.
Also, older people are not coming out of their houses, and we must take that into account. People are concerned and they’re taking care of themselves.
Lottery Daily: What has been the biggest impact in the past few months? How do you plan to recover?
DD: Our income comes from commissions. In other words, it comes from taking bets for the lotteries. But this has a terrible impact on employees, on the money they need to cover basic needs. The impact on employees has been bad.
Lottery Daily: Last month, you signed an extension of the agreement that allows employees to collect a non-remunerative allowance. Do you expect to extend this for another period?
DD: That really helped us, so yes. It has helped us to make sure that people received the Mobile Living Wage and the rest was covered by the employer. It’s a very important help from the government if this continues at least until we can recover. We’re talking about the possibility that would allow us to continue operating.
How many businesses, how many shops, how many lottery agencies are going to be able to continue and how many are going to generate at least 50% of what they usually do to continue paying salaries, it’s all a big question.
In the City of Buenos Aires, around 4000 families depend on lottery agencies, so it’s very worrying that all these people cannot continue to support themselves.
Lottery Daily: Online gambling is moving forward in Buenos Aires, what are the expectations around this vertical? How can you incorporate that to favor agencies?
DD: We submitted a note to LOTBA authorities last year, asking them to include us and allow us to take bets. We can build customer loyalty because we can collect data from them. [It’s necessary] to build a registry, we know them and we can personally see who is going to place a bet, to check if it’s not a minor who perhaps grabbed their parents’ credit cards. In agencies, you can control these things, follow a number of steps that neither a bank or a credit card has, much less digital payments apps.
As agencies, we are waiting for the lottery to bring us to the online gambling circuit. We have the clients, and we were the first ones to gain the trust of sports predictions players with the ‘Prode’ product, which was cancelled after the National Congress transferred the National Lottery to LOTBA. So we’re unable to offer our clients new developments.
People are going to join the online gambling world because they want to see and they want to bet on a game that takes place both in Argentina and in Europe, and they will have the possibility to do so. But lottery agencies will be excluded from this. We don’t think it’s fair.
Lottery Daily: So what tools do you plan to implement to inject liquidity and close the current fiscal year with a neutral balance?
DD: This is a subject that is beyond our reach, it’s something we can’t handle. We depend on lotteries, on whether people play or not. In other words, we cannot improve the activity, we cannot offer anything that may interest a potential client. Injecting liquidity is very, very difficult. Gambling is a very special sector, and unlike popular belief, people don’t tend to play more when they have less money. It’s not like that, if people don’t have money, they don’t play. They start putting aside leisure activities and prioritize basic needs.
