In just a few years, the sports betting industry has become a billion-dollar business in Brazil, with a projection for the sector to generate around R$ 115 billion (23bn) by 2023. With the rapid expansion of this market, there is great anticipation regarding regulation, as the country represents one of the largest global markets for this industry. According to data from Cupom Válido and Similar Web, Brazil leads the ranking of countries with the highest access to betting websites worldwide. In the past year alone, there were over 14 billion accesses.
In this scenario of the sector's rapid growth, Brazil is on the verge of regulating the sports betting market through Bill 3626/23. The Senate is set to vote on the bill in November, with an urgency status. The project provides significant definitions of how betting houses should operate, the expected taxation, advertising guidelines, and, most importantly, regarding payments.
For Leonardo Baptista, CEO and co-founder of Pay4Fun, the first payment institution to operate in the sports betting sector and receive authorization from the Central Bank of Brazil (Bacen), regulation is aimed at meeting the growing demand of the sector by establishing a regulatory framework that enhances transaction security. One of the key points of the document is that only Bacen-regulated payment institutions will be allowed to offer transactional accounts for the payment of fixed-odds bets and the receipt of potential winnings.
But why is it important for payment institutions to be authorized and regulated by the Central Bank?
Payment institutions regulated by Bacen have robust structures for managing risks, controlling the effectiveness of possible damage to operations, in addition to providing a high level of service and relationships for routine transactions. Bacen plays an important role in supervising these institutions, minimizing systemic risks and contributing to the integrity of the financial system as a whole.
Furthermore, these institutions work with high levels of diligence to Prevent Money Laundering (PLD), following Bacen rules. Strict procedures are implemented to identify your customers, constantly monitor transactions for suspicious activity or unusual patterns, and ensure that staff are always trained through ongoing training programs.
Another point is care for business continuity documented and presented to the regulator and auditors. These plans ensure the evolution of service provision, guaranteeing the security of transactions for customers, partners and users.
Operating with an unregulated financial institution presents a series of risks, such as lack of assistance in the event of financial problems, low level of risk management, lack of anti-fraud due diligence and money laundering prevention guidelines, lack of equity obligations minimum, bringing insecurity about the company's financial capacity and continuity of its operations, which can directly impact the customer and their deposited resources.
Regulation is an important milestone for the market, which is expected to grow in the coming years, bringing new business opportunities. With regulation, the sector should become more mature and well structured, benefiting everyone involved.
Founded in 2018, Pay4Fun is the first payment institution, operating in the sports betting sector, to receive authorization from the Central Bank of Brazil. Operating with more than 500 integrated websites in the entertainment segment, the company reached the mark of R$2.6 billion (US$ 520m) in financial transactions in 2022.
The company was considered the Best Payment Method for Latin America in the awards promoted by SAGSE 2022 and chosen as the Best Payment Method at the Brazilian iGaming Awards. In 2023, the company won the RA 1,000 seal, from Reclame Aqui, 3rd place as the best financial service company to work for in GPTW and 2nd place in the SBC Awards, in Barcelona, as payment innovation of the year. To find out more about the company, visit the website or connect on Linkedin.
Source: GMB
