There is another sector of the economy that has taken advantage of the boom in bookmakers in Brazil: banks and fintechs that serve as a bridge so that platforms can rely on Pix as a tool to receive sports bets and pay prizes.
Before Pix existed, bookmakers were limited to credit cards, which ran the risk of having operations canceled because operators could consider suspicious transactions.
“The betting site market has grown five times over the last four years in Brazil and Pix is the main reason for this”, says André Gelfi, president of the Brazilian Institute of Responsible Gaming (IBJR) in an interview with Pipeline.
The IBJR estimate is that the Brazilian sector will register BRL 5.8 billion in revenues in 2023, with BRL 84 billion in bets. According to Gelfi, more than 90% of what moves today is done via Pix. In addition, the term (PIX) has even been incorporated into the name of some bookmakers.
To provide Pix to betting sites, banks and fintechs charge a commission, which may vary depending on customer size and volume. Pay4Fun, for example, a payment institution that works in Brazil with some of the main global players, such as Bet365 and Betano, and charges fees ranging from 2% and 4% for user deposits and from 1.5% to 3 % for redemption of prizes. In 2022, the company reached the mark of 4.95 million transactions with Pix.
In addition to Pay4Fun, institutions such as Stark Bank, BS2, Banco do Brasil, Asaas and Zro Bank also provide Pix for betting sites. This is an interesting segment for those focused on serving the corporate public, such as Stark Bank, BS2 and Asaas. Stark, for example, works with houses like Betano and Bet365. Asaas, partner of names like Bet Nacional.
Exchange banks also started to make money from remittances from Brazil to the headquarters of the sites abroad, most located in Curaçao, Malta and the United Kingdom. Pay4Fun, for example, works with four partner exchange banks.
A recent change in the foreign exchange law, which came into force at the end of 2022, raised the limit for payment institutions to be able to carry out foreign exchange transactions. “The market has become more accessible and flexible”, says lawyer Gabriela Ponte Machado, from the Lobo de Rizzo law firm, in an interview with Pipeline.
Popularization of bookmakers leveraged another segment
With the popularization of bookmakers, another sector that grew was that of groups offering services or intermediation of payments. They are companies that represent the sites in Brazil, receive the money in a bank account and then transfer it abroad. Anspacepay, for example, works with 25 clients in this market, including PixBet, and also operates with exchange banks to make remittances abroad.
Another example is Causin Serviços de Pagamentos, which appears as the holder of the destination account for those who make a Pix on the Betano, Bet365 and BetFair websites. Causin has an account at both Stark Bank and Banco do Brasil.
If Brazil proceeds with the regulation of sports betting activity, a part of this payment market could be affected. One of the debates in Brasilia involves the requirement that players have some authorization from the Central Bank. “That would bring security to the market and make the sites more comfortable because the BC would be a seal of quality”, says Gelfi, from the IBJR.
Currently, Banco do Brasil is the only bank with wide national prominence to be close to the betting sector. “We were the ones who gave a hand to this type of operator in the beginning, when they needed it most”, says the CEO of the institution, Leonardo Baptista. “If Bradesco enters, it won’t have the knowledge I have of the market. The operator calls me with a pain that Itaú won’t know how to solve.”
It should be noted that debates in the National Congress, however, are not focused on forms of payment, but on the bookmakers themselves, which may receive some form of taxation and other requirements to operate legally in the country.
According to Pipeline, the companies believe that the regulation will not decrease the betting base, but the number of bookmakers. Today, the Ministry of Finance estimates that 1,000 houses are operating in the country.
