This is what the Attorney discovered about Baloto’s IGT License in Colombia  

Only two months before the end of the contract for the operation of the Baloto, which is currently in the hands of the multinational IGT (formerly Gtech), which has been the operator of the game since it was introduced in the country in 2001, there is a high risk that it will come to an end.

In three opportunities the contract to get the operator has been declared void and under the conditions required by the current regulation, IGT, according to Coljuegos (authority in the matter), would not participate in the bidding to continue with the business, because, according to its arguments, "the percentage of exploitation rights is not of interest for the gambling sector".

Coljuegos, which was also an alternative so that the operation of the Baloto is not stopped, indicated that the direct operation of the Baloto by the administration is not possible as from May 25, 2022 (the current operator has the contract in force until May 22), since they lack the human, budgetary, technological, normative regulation and commercial experience necessary to do so.

In the middle of the situation are the resources for the health sector which are contributed by the gambling sector, so the General Attorney's Office took action to get to the bottom of what is happening with this contract.

The delegated team of the Attorney General's Office for the preventive surveillance of the Public Function, which is in charge of investigating the case.

What is the situation that has led to the fact that the contract for the operation of the Baloto has had to be declared void three times?

Attorney General's Office: First of all, it must be clarified that Coljuegos is the entity in charge of the structuring of the concession process of the Baloto gambling, so the Attorney General's Office knows the causes of the declaration of desertion of the selection process due to the access to public information contained in Secop II (contracting platform).

In this sense, it must be specified that the intervention of the Public Prosecutor's Office in this selection process has been carried out solely and exclusively in the exercise of its preventive function, which empowers it in accordance with its constitutional, legal and regulatory powers, to monitor all contracting processes initiated by Coljuegos, for the purpose of granting the new Baloto concession.

The Attorney General's Office has learned, through the information in Secop II, that both public bids LP-001-2021 and LP-001-2022, as well as the abbreviated selection SAMC-001-2021, were declared deserted because no bidder submitted an offer.

Q: Is it true that all this is because Coljuegos tightened the economic requirements?

Attorney General's Office: On the occasion of the exercise of the preventive function, the Attorney General's Office evidenced that some situations that could have led to this situation, according to the worktables that were held with unions and interested parties, was that Coljuegos included and maintained as an evaluation criterion a minimum guaranteed income in the first two selection processes.

This, in the opinion of some potential bidders, could have generated artificially high bids to satisfy Coljuegos' requirements, or that during the execution of the concession, risks of financial imbalances could arise based on the non-compliance with the minimum guaranteed revenues.

At the time, the Attorney General's Office, through the delegate for the Preventive Surveillance of the Public Function, after the work tables and the review of the studies and previous documents, especially the conclusions made by Coljuegos in these documents, asked about the financial and operational arguments for the requirement of the minimum guaranteed income, given that Coljuegos itself in the market study recognizes the oscillation in the gross income and the variability within the operation of the gambling game called Baloto.

To this is added the impact that the increase in exploitation rights may have on the gambler and therefore, on the effect on gross income. Finally, the determination of a profit ceiling of 15.23%, considering that "by virtue of the principles of economic rationality and administrative efficiency "the monopoly of gambling must obey economic and administrative efficiency criteria that guarantee the profitability and productivity necessary for the full compliance of the public and social purpose of the same".

Q: What has the Ombudsman's Office been able to identify regarding the rules for choosing the operator, are they such that no one should sign up?

Attorney General's Office: seeking to protect the public patrimony, the legal order, the fundamental rights and guarantees, as well as the principles of transparency and plurality of bidders that guide public contracting, made observations to the rules to choose the operator, specifically to the 'minimum guaranteed income and collateral benefits' as evaluation criteria, and the 'experience of the bidder in the operation of gambling, as an enabling requirement.

However, it was striking to the Attorney General's Office that no offers were submitted in the last bidding, despite the fact that Coljuegos made changes in such requirements. For this reason, the matter was referred to the Elite Working Group against Collusion of the SIC (Superintendence of Industry and Commerce) to evaluate whether there were alleged conducts against free competition.

Q: Regarding costs or operator's expertise, if the regulations are too demanding, they would suggest changes in that sense.

Attorney General's Office: the mission function of superior vigilance with preventive purposes and management control performed by the Attorney General's Office in no case implies co-administration, interference or change in the administrative, financial, technical or legal decisions of the authorities, since the preventive action of this control entity is limited by a framework of respect for its autonomy and independence.

Coljuegos is the competent and responsible entity for making substantive decisions on the matters under its charge, a responsibility that cannot be transferred to the control agencies, in accordance with the provisions of the Contracting Statute.

In this sense, the Delegate Attorney General's Office asked the respective questions for Coljuegos to explain in detail the technical, legal and financial reasons for the minimum guaranteed income and collateral benefits, considering the worktables held with Asojuegos and Fecoljuegos, who expressed their concern in this regard.

Q: Time is against to choose the operator of the gambling, Coljuegos does not accept either to operate it while the situation is being solved. What other way is there?

Attorney General's Office: the existing ways to choose the operator of Baloto are defined in the General Statute of Public Contracting and in the Law of the proper regime of the rent monopoly of gambling. In this sense, it is a decision of Coljuegos to define what other path exists, since the Attorney General's Office cannot replace the administration in making its decisions.

Q: There is a latent risk that the Baloto will cease to operate, at least for a while, due to the situation that is taking place.

Procurator's Office: Coljuegos must take all necessary actions to guarantee and avoid the occurrence of a risk in management and public contracting, reason why the Procurator's Office, since last February 23, urged the entity to duly apply the principles of planning, transparency and free concurrence to guarantee the obtaining of revenues that will be destined to the health system, which would undoubtedly put at risk the fundamental rights of Colombians.

Q: How many monthly resources would the health sector stop receiving if this game ceases to operate?

Procurator's Office: in compliance with the mandate to protect the legal order, the public patrimony and the right to health, it preventively monitors the contracting processes related to the monopoly of gambling industry.

In accordance with Law 643 of 2001 and Agreement 03 of 2021 of Coljuegos, the resources that the Health System would receive with the new concession correspond to 32.5% of the total exploitation rights. These resources, according to Coljuegos' projections, would generate between 1,233 million and 1,517 million pesos between 2022 and 2027 (the term of the contract).

Q: What preliminary conclusions has the Attorney General's Office reached in its review of the matter?

Attorney General's Office: the following preliminary conclusions have been reached in accordance with the preventive actions carried out:

1. The requirement of evaluation criteria such as the collateral benefits generated by the operation of the game and the minimum guaranteed income has not been in line with the market conditions.

2. In view of the scenario that no bids were submitted in the last bidding, despite the fact that Coljuegos made changes in such requirements, it was necessary to refer the matter to the Elite Anti-Collusion Working Group of the SIC to evaluate whether there were alleged conducts against free competition.

3. In the present case, no unforeseeable or irresistible facts or circumstances were evidenced or have been presented by Coljuegos that justify a temporary and extreme measure to resort to an exceptional procedure for the selection of contractors that does not guarantee the plurality of bidders, and that any direct contracting to be carried out will also be covered by the restrictions set forth in the Law of Guarantees (Law 996 of 2005).

For all of the above, it is possible that a risk may materialize in the obtaining of revenues destined to the Health System and in the protection of the right to health of Colombians.