Pix is responsible for moving R$ 21 billion monthly in the iGaming market. Lawyers Gabriela Borges and Gustavo de Santana, from FGV Direito Rio, point out in an article in Jota that regulators have banned the use of credit cards, but the impact is limited, as the method created by the Central Bank dominates. The debate on restricting or regulating these instant transactions divides opinions, considering financial inclusion, indebtedness, and control of the sector.
Online betting is increasingly present in the daily lives of Brazilians. Initially, this rapid expansion was driven by sports betting, especially due to the popularity of sports in the country. However, the market for so-called bets did not stop there. Online betting now encompasses a diverse range of modalities and is not limited to sports competitions, with even attempts to create betting markets for electoral outcomes.
Despite the popularity that online gambling has reached in Brazil in recent years, the number of bettors and the amounts moved still surprise. According to research from the Central Bank, in the first eight months of 2024, Brazilians spent between R$ 18 billion and R$ 21 billion per month on online betting, and approximately 24 million people made at least one bet during this period through the Pix payment method.
The age range of bettors is quite diverse, with an emphasis on young people between 20 and 30 years old. Data from August 2024 reveals that the average monthly value of transfers increases with age: while younger bettors spend about R$ 100 per month, older ones exceed R$ 3,000 monthly. Another alarming data is that, in August 2024, about 5 million people from families benefiting from Bolsa Família sent R$ 3 billion to betting companies via the Pix platform.
The use of credit cards for online betting, although less frequent than Pix, has also attracted attention from both the market and regulators due to the risk of indebtedness associated. By betting using credit, players can easily exceed their limits, accumulating debts that become difficult to settle, especially with high credit card interest rates.
In light of this scenario, Brazilian regulatory bodies have shown justified concern about the growth of online betting in the country. It is understood that this phenomenon may result in negative impacts on the economy and society, such as the possible withdrawal of resources previously destined for consumption, the increase in indebtedness of vulnerable sectors of the population, and public health risks associated with excessive use of these betting platforms.
As an initial response to this growth, the Ministry of Finance determined that the use of credit cards for online betting would be prohibited from January 1, 2025. However, the Brazilian Association of Credit Card Companies and Services (Abecs) argued that the use of credit for betting is quite limited and thus anticipated the measure, implementing the prohibition from October 2, 2024.
In any case, the prohibition of the use of credit cards in online betting raises doubts about its effectiveness in containing the problems associated with the growth of this market. As indicated by the research from the Central Bank of Brazil mentioned above, Pix has been the main channel for making bets in the so-called "bets" and given that credit represents only a small portion of transactions in the sector, it is not certain to what extent the measure will have a significant impact in preventing excessive indebtedness or controlling the volume of bets.
Thus, the prohibition of the use of credit cards in online betting may have a limited impact in mitigating the indebtedness of the population. Bettors can still resort to other financing modalities, such as Pix Crédito, which offers the possibility of payment through the instant payment system, using the credit card limit for the installment of transactions, functioning as an indirect credit that can finance bets. Due to the ease of use and wide acceptance of Pix in Brazil, there has been discussion about the possibility of limiting or even prohibiting the use of Pix and Pix Crédito for betting in the country.
Pix was developed by the Central Bank with the aim of filling a series of gaps existing in the basket of payment instruments currently available to the population. As pointed out by the Advanced Studies Center on Regulation of the National Financial System (NEASF) of FGV Direito Rio, Pix is the result of a history of advances in the Brazilian payment system, initiated with the development of the Brazilian Payment System (SPB) and the Reserve Transfer System (STR).
This means of payment quickly became essential in the daily lives of Brazilians. By September this year, almost 800 million keys had been registered, with more than 760 million accounts of individuals. Only in September, transactions via Pix surpassed R$ 2.4 billion[4]. This practical and accessible means of payment has been the main channel for making bets in the so-called "bets".
The debate on the prohibition of Pix for online betting has been dividing opinions of important market entities. Some of these institutions believe that an immediate prohibition or, if this is not feasible, the limitation of Pix for betting may have a positive impact. Others, however, argue that the regulatory focus should be on the activity of betting itself and not on the means of payment used.
The Central Bank, in turn, has been implementing more stringent regulations regarding Pix in recent months. To combat the increase in fraud and scams, the BCB established a limit of R$ 200 for transfers made by new devices, with a daily ceiling of R$ 1,000. Transactions over R$ 200 can only be made by devices that have already been registered by users, thus increasing the security of operations.
However, it is important to inquire whether the prohibition of Pix would be just a superficial solution, unable to solve the problems related to online betting. Understanding whether the sharp growth of "bets" in recent years is a result of the facilities provided by Pix or if it is part of a broader trend in consumer behavior is a challenge that must be faced with caution.
If the sharp growth in betting is a broader trend in player behavior, the prohibition of Pix may not have the desired impact. Bettors can easily migrate to other payment methods, such as debit cards and prepaid cards, continuing to make their bets.
In addition, the prohibition of the use of Pix in "bets", as well as the implementation of other regulatory barriers, must be carefully evaluated to ensure that the digital agenda of the Central Bank is preserved. This agenda aims to make payment methods more accessible and cheaper, promoting financial inclusion and facilitating transactions between users. Restrictions that limit the diversity of payment options must be carefully evaluated to ensure that the advances achieved are not compromised.
It is undeniable that the increase in the number of bettors and the significant volumes moved in "bets" are alarming. The potential negative impacts on the economy and society need to be considered in the formulation of effective regulation. However, this regulation must be carefully crafted, ensuring that the goal of mitigating the harms associated with online betting is achieved without compromising the advances made in payment methods.
Gabriela Borges
Doctor and Master in Regulation Law from FGV Direito Rio. Master (LL.M.) in Law & Economics from George Mason University. Postgraduate in Corporate and Capital Markets from FGV Direito Rio. Professor at FGV Direito Rio and coordinator of the Advanced Studies Center on Regulation of the National Financial System (NEASF/FGV Direito Rio)
Gustavo de Santana
Bachelor of Law at FGV Direito Rio. Researcher at the Advanced Studies Center on Regulation of the National Financial System (NEASF/FGV Direito Rio)
