CB - How do you think the sector will be from January onwards? Will it grow or shrink?
Leonardo Baptista - Both things will happen. Initially, the market will shrink in terms of operators, the websites that are operating. This market will shrink in terms of the number of operators because not every company has R$35 million to invest and start operating. Now, in the Brazilian market, there is no way to reverse this rocket; betting in Brazil has no turning back. It is a market that grows by nature.
The president threatened to end betting. Many congressmen are also against it. How do you analyze this stance?
This rocket has no reverse. One of the things regulation will bring is education for everyone, including alleviating the fear surrounding betting. A regulated market helps provide a clearer picture of numbers, scale, and it generates taxes and employment.
You can support players who may develop gambling addictions because this issue exists whether the market is regulated or not. With an illegal market, it's worse because betting will still happen. Historically, if you look at the global market, very few countries have outright banned gambling. Some global powers fully allow and regulate betting: the United States, the United Kingdom, Italy, and Germany.
The solution is regulation, not prohibition. Prohibiting it is sweeping it under the rug and favoring those operating improperly. We’d go back to Chinese websites, unfulfilled payouts, and players left without recourse after winning because there’s no one to hold accountable. The path is regulation, not prohibition.
The National Consumer Secretariat (Senacon) issued an ordinance on betting advertising. What do you think of it?
It took too long to happen. One of the major topics in our industry, alongside regulation, is precisely advertising, propaganda, and marketing. At times, it’s been excessive.
First, I see betting as entertainment—it’s not guaranteed income, extra income, or money to pay monthly bills. You cannot talk about guaranteed prizes, money, or income under any circumstances. Everything being done now is for the benefit of a regulated market.
I think many took advantage of the regulatory gap to exploit improper advertising. Influencers on Instagram were gambling, flaunting endless wins, and showing off luxury cars like Porsches. This is prohibited and should have been banned from day one.
How does Pay4Fun work? What role does it play in sports betting payments, and how large is it?
I like to draw a parallel to help people understand: we are like the card payment machines for betting sites. Just as card machines are used in restaurants or stores, we perform a similar function for betting platforms. We are the intermediary between betting sites and bettors.
We handle the financial transactions for money deposits and withdrawals on betting sites. When a bettor wins, we process the payout—we’re right in the middle. Among the 290 companies applying for licenses, 240 are still in the process, and we operate with over 50% of them. Currently, around 140 companies work with us.
How do payment systems help authorities identify fraud and money laundering?
Money laundering has always been a concern. From the beginning, Pay4Fun required users to create digital accounts, similar to the process of opening an account at a digital bank today.
Users create an account, submit all necessary documents, and based on that, we know who they are. We only accept bank transfers from accounts linked to their tax ID (CPF). Prize payments work the same way. The flow of money in and out is a closed loop, making money laundering difficult, as all transactions are backed by documentation.
Pay4Fun's Pix innovation was a game-changer. We were the first company to stamp Pix QR Codes with the CPF of the generator. If someone generates a Pix QR Code to deposit into a betting site and tries to involve a third party to launder money, the Pix transaction can’t even be processed. I believe that, especially with regulation, financial and payment institutions will play a crucial role in ensuring this sector operates correctly.
Technologically, what could be improved?
The Central Bank is a fantastic institution, always advancing technology. They’re now working on the digital currency, Drex, and the regulation of cryptocurrencies, which will bring significant change.
For 2025, particularly in our field, things will evolve considerably with the rollout of ITP (payment initiator). To illustrate, Pix is already fast, but its usability has some friction—you need to generate a QR Code, log into online banking, enter a password, and confirm the transaction, which takes up to a minute. With ITP, the same transaction will be completed in five seconds.
Source: Correio Braziliense
