Growing concerns about the illegal betting market in Brazil have been highlighted following the submission of the final report by the Bets CPI to the Federal Senate. In this context, Leonardo Baptista, CEO and co-founder of Pay4Fun, a company authorized by the Central Bank, highlighted the risks of unlicensed platforms and pointed out the most effective mechanisms to combat these activities.
Warning signs about irregularities in the sector
Pay4Fun, the first regularized payment institution in the sector, has already terminated relations with more than 600 irregular operators. According to Baptista, the main indicator of illegality is the website domain.
Since January 2025, only “.bet.br” domains are authorized to operate in the country. Platforms with “.com” endings or other variants are in disagreement with Brazilian legislation.
In addition to the domain, there are other warning signs:
- Use of prohibited payment methods, such as credit cards or cryptocurrencies;
- Lack of identity verification;
- Failures in money laundering prevention systems;
- Misleading marketing campaigns that promise guaranteed gains.
To prevent the growth of these platforms, Pay4Fun has adopted strict measures. According to Baptista, “payment methods are the main pillars of the regulated ecosystem”.
The company requires complete documentation, validation of the Individual Taxpayer Registry (CPF) and only authorizes transactions with the account holder’s accounts. This prevents transactions by minors or individuals on restrictive lists.
Another decisive factor is the financial blockade, therefore, the CEO of Pay4fun stated: “Eliminating access to the financial channel is the most effective way to make irregular operations unfeasible”.
Even if websites manage to bypass URL blocks, without access to the payment system, the activity becomes unfeasible. More than 99% of transactions occur via Pix, which reinforces the importance of this control.
Pay4fun real-time monitoring
Pay4Fun also monitors transactions in real time and has a strict analysis process for new partners, called KYM (Know Your Merchant). The goal is to ensure that only companies licensed by the Secretariat of Prizes and Bets (SPA) are integrated into the operation.
In Baptista’s opinion, Brazil can follow the British model, which invests in integration between financial institutions, operators and regulators. He believes that cooperation between companies and the public sector should be strengthened. There are still challenges such as the SPA’s low oversight capacity and the lack of integration between the responsible bodies.
Regarding regulation, the executive warned: “Regulation already exists, but it needs to be accompanied by more agile monitoring and effective punishments.” He also advocated for stricter rules against misleading advertising, especially that made by influencers who associate betting with promises of easy profit.
Pay4Fun currently works in conjunction with the Central Bank, the SPA (Secretariat of Prizes and Bets) and the Financial Activities Control Council (COAF). The company sends alerts about illegal campaigns, suspicious transactions and irregular platforms, in addition to collaborating with licensed operators in the exchange of information.
Despite the difficulties, Leonardo Baptista sees a promising scenario. For him, Brazil can become an international reference in the sector, as long as there are structural advances. Among the crucial points, he highlighted the regulation of crypto assets and the strengthening of the SPA with more autonomy and a specialized technical team.
Finally, the company is also committed to consumer education. Baptista stated: “The country will be able to move forward, including in the discussion on the legalization of physical games, such as casinos, consolidating a safe, transparent and sustainable environment.”
