On January 1st, Law No. 14.790/2023 will fully come into effect after a long hiatus and various controversies surrounding the sector in 2024. Leonardo Baptista, CEO of Pay4Fun, a pioneering company in mediating payments between bettors and bets, gave an interview to the Correio Braziliense Podcast, discussing the norms and technological innovations of the sector. For him, "to prohibit the activity is to sweep it under the rug".
CB - How do you assess the sector will be from January? Will it grow or shrink?
Leonardo Baptista -
Both things will happen. Initially, the market will shrink in terms of operators, the sites that are operating. This market will decrease in the number of operators because not every company has R$ 35 million to put in and start operating. Now, in the Brazilian market, this rocket cannot go backwards, the bets in Brazil are irreversible. It is a market that naturally grows.
The president threatened to end the bets. Several deputies are also against it. How do you analyze this stance?
This rocket has no reverse. One of the things that regulation will bring is, precisely, education for everyone, including, to remove this fear behind the bets. A regulated market helps to have an idea of numbers, magnitude, generates taxes and jobs.
You can help the player who may have an addiction because this exists with a regulated market or not, and with the illegal market it is worse because the game is there. If you look historically and look at the global market, very few countries have generally prohibited betting. There are global powerhouses where gambling is completely allowed and regulated: United States, England, Italy, Germany.
So, the way is regulation, not prohibition. Prohibiting is sweeping under the rug and favoring those who were operating in the wrong way. So, we return to the Chinese sites, prizes that are not due and leave the bettor without receiving when they won a prize because there is no one to knock on the door and charge. The way is not prohibition, it is regulation.
The National Consumer Secretariat (Senacon) published the ordinance on advertising of bets. What did you think?
It took a while for this to happen. One of the great things about our market along with regulation is precisely this theme of advertising, propaganda, and marketing. Sometimes it was even abusive.
What I understand first: Bet is entertainment, it is not guaranteed income, it is not extra income, it is not money for you to pay the month's bills. You cannot speak, in any way, of prize, money or guaranteed income. All this that is being done and worked on, and was anticipated now, is for the good of the regulated market.
I think there were a lot of people who took advantage of the regulatory vacuum, precisely to exploit completely undue advertising. There were influencers on Instagram playing, showing infinite gains, driving Porsches. This is forbidden and should have been forbidden from day zero.
How does Pay4Fun work? What is its role in the payment of sports bets and its size?
Look, I like to draw a parallel for people to understand well, that we are the little machines of the betting site. So the same card machine that you use in a restaurant, in a store where you are going to buy something, we do the same role, but for betting sites. We are right in the middle between the betting site and the bettors.
We take care of the entire financial part of money entering and leaving the betting site and vice versa. When the bettor wins, we make this prize payment, we are in the middle. There are still companies being called, but of the 290 companies that applied for a license, 240 are still in the process, and of them, we operate with more than 50% approximately. About 140 companies operate with us today.
How do these payment methods help authorities identify fraud and money laundering?
There has always been a lot of talk about money laundering, and from the beginning, Pay4fun required users to create a digital account, as is the process of opening in a digital bank today.
They create an account, submit all documents and, based on this, we know who the people are and accept bank transfers coming from that CPF. And the prize payment is just the same. The entry and exit is a closed tunnel, you couldn't do much in terms of money laundering and we had all the documentation behind it.
The Pay Pix brought an innovation, we are the first company that stamped the Pix QRCode with the CPF of the person generating it. If I generate a Pix QRCode to make a deposit in a betting house, pass it to a third party to deposit in his account and try to make some money laundering scheme, he can't even process the Pix. I understand, especially now with regulation, that financial and payment institutions will play a crucial role in making this sector run correctly.
In technological terms, what could be improved?
The Central Bank is a fantastic institution, which has been working on technology all the time. They are now working on the Digital Real, the Drex, comes the regulation of cryptocurrencies, so this will be a big change.
I believe that for the year 2025 and for our specific area, it will change a lot because the ITP, the payment initiator, is already in operation. To give you an idea, Pix is fast today. But it has a usability problem, because you need to generate the QR Code, open the internet banking, enter the password, validate and finalize the transaction. This takes up to a minute. With the ITP, the same transaction will be done in five seconds.
Source: Correio Braziliense
