The sports betting and online gaming sector completes its first year under regulation in Brazil. Leonardo Baptista, CEO and co-founder of Pay4Fun, assesses this period and analyzes the main challenges that the legalized market still needs to face in the country. Check it out!
Brazil took its time, but finally regulated sports betting. In almost a year, the sector has already taken on the contours of a public policy, going from an industry that already existed in practice to a market that has started to generate formal jobs, investment in technology, and operate with clear rules. That was the right move.
But the process is still incomplete. The illegal market continues to account for about 60% of operations in the country, according to studies by the Brazilian Institute for Responsible Gaming (IBJR) and Locomotiva Pesquisa & Estratégia.
In other words, most of the money involved remains beyond the reach of oversight, tax collection, and policies to protect gamblers, which represents a challenge not only economically, but also in terms of consumer protection.
One of the structural factors behind this distortion lies in the way regulation has progressed: it doesn’t cover land-based gambling, which opens up even more opportunities for illegal gambling at the moment.
“In several countries, the approach was reversed: first, in-person regulation was followed by digital regulation. This choice allowed the sector to transform into a driver of tourism, formal employment, and economic development. Brazil has the potential to replicate this experience, provided that regulatory advancements occur with legal certainty and a comprehensive impact analysis. “, explains Leonardo Baptista, CEO and co-founder of Pay4Fun.
According to the executive, including land-based gambling in the regulation would bring immediate gains: more revenue, greater job creation, and greater monitoring capacity. Not regulating what already exists does not reduce the activity, it only prevents the State from monitoring and controlling it.
According to him, another crucial point is the use of cryptocurrencies. Today, a significant portion of illegal betting relies on crypto transactions to avoid tracking. The Central Bank is moving towards complete regulation of this environment, but this needs to be accompanied by the possibility of using crypto as well by licensed betting operators.
Otherwise, the informal sector will continue to benefit from a technology that could be an ally of oversight if integrated into the regulated financial system.
