Pay4Fun data shows Brazilian online betting sector regaining momentum after regulatory shock

Brazil’s newly regulated online betting market is showing signs of recovery after a sharp contraction in early 2025, according to data from payment provider Pay4Fun. The sector saw a steep fall in transaction volumes when new legislation took effect in January, introducing stricter legal, tax, and operational requirements for both operators and users.

Pay4Fun, the first payment institution authorized by the Central Bank of Brazil to operate in the sports betting and online gaming segment, reported that the total value of transactions processed through its integrated platforms fell 76% in January compared with the 2024 monthly average. The decline deepened to over 90% in February as both players and operators adjusted to the new environment.

CEO and co-founder Leonardo Baptista described the downturn as a “natural adjustment to the new reality,” noting that the regulations were designed to formalize a market that had previously operated without clear legal boundaries. He said the changes aimed to distinguish compliant, licensed platforms from unregulated operators, improving security for bettors and the industry.

The legislation introduced user verification requirements, including document submission, facial recognition, and linking bank accounts, measures that initially created friction in the customer journey. Many players were also unsure which platforms were officially licensed, while operators faced high licensing costs and compliance demands that prompted some to temporarily leave the market.

By March, the contraction had narrowed, with transaction volumes down 22% compared to the same month in 2024. The rebound gathered pace in April, when activity surged 1,973% over the previous month. May continued the upward trend with a year-on-year gain of 115%. Pay4Fun’s figures are based on thousands of transactions processed on regulated platforms operating legally in Brazil.

The recovery has been supported by greater public awareness of licensed sites, which in Brazil use the “.bet.br” domain, and by the arrival of major international operators entering under the new framework. Baptista said platforms are updating their systems to meet regulatory requirements, a shift that is increasing both consumer trust and competitive intensity in the market.

With clearer rules and the participation of large, established betting companies, Pay4Fun projects that total betting volume in Brazil could grow between 20% and 30% by the end of 2025. The company believes the country has the potential to become one of the largest regulated betting markets in the world.

Founded in 2018, Pay4Fun processed R$2.6 billion (US$474 million) in transactions in 2022 and has received multiple industry accolades, including Best Payment Method for Latin America at the 2022 SAGSE Awards and Best Payment Method at the Brazilian iGaming Awards. It was also recognized in 2023 with the RA 1.000 seal from Reclame AQUI and ranked among the top financial services companies to work for in Brazil.