Brazilians spent around R$ 3 billion on online betting in August, according to the Central Bank.
The monthly volume of transfers via Pix from individuals to online betting companies ranged between R$ 18 billion and R$ 21 billion this year, according to estimates from the Central Bank (BC). In August, the monthly volume of online bets was R$ 20,8 billion, compared to R$ 1,9 billion in revenue from all Caixa Econômica Federal lottery draws.
The data comes from a Technical Note titled 'Technical Analysis of the Online Betting Market in Brazil and the Profile of Bettors,' produced by the Statistics Department of the Central Bank at the request of Senator Omar Aziz (PSD-AM) — the document was not officially released by the Central Bank. This is the first official data analysis of the size of the online betting market in the country.
The note considers all types of betting: those where the bet is based on a real event (such as a football match) and online casinos, which are games of chance. Both modalities are undergoing a regulatory process in the country.
The data only considers funds paid by bettors using the Central Bank's instant payment system and does not include payments made through other means, such as debit or credit cards. This means the figures could be even higher.
The Central Bank's technical note also does not account for any prizes withdrawn by bettors, but experts warn that betting can result in frequent losses, compromising the family budget, especially for low-income families.
15% retention
The Central Bank emphasizes that the figures represent the gross transfers to the companies, the amount contributed by the players. This includes the transfer for the bets themselves.
Based on transactions between companies and individuals, the regulatory body estimated that approximately 15% of bets are retained by the platforms, with the remainder distributed as prizes to the winners.
The technical note warns, however, that these values may be underestimated. Bets can be placed through channels other than Pix, such as credit card and TED (bank transfer), but prizes must be paid exclusively by electronic transfer.
"Thus, it is expected that the values of the bets may be underestimated (despite external information that a large part of the bets are made via Pix), and that the payment of prizes should correspond to almost the entirety," says the document.
Family Bag
According to the data in the report, it is estimated that, in August 2024, 5 million people belonging to families benefiting from Bolsa Família sent R$ 3 billion to betting companies via Pix, with the median amount spent per person being R$ 100. Of these people, 4 million (70%) are heads of household (those who actually receive the benefit) and sent R$ 2 billion (67%) via Pix to betting sites.
Omar Aziz also released data indicating that 8,91 million people belonging to families benefiting from the Bolsa Família program sent R$ 10,51 billion to betting companies using the Pix platform between January and August of this year — but this data was not included in the BC's technical note.
A law passed last year established rules for this market, which is currently being regulated by the Ministry of Finance. Starting in October, only companies that have requested authorization from the Ministry of Finance will be allowed to operate. In January 2025, all rules will come into effect, including a ban on credit card betting.
Analysis in progress
The Central Bank study also points to challenges in measuring the betting market in Brazil and emphasizes that the information in the report consists of estimates and preliminary results. According to the document, a more in-depth analysis is underway.
The strategy adopted was to evaluate the transactions of CNPJs (Brazilian company tax IDs) related to gambling and betting operations. However, the Central Bank noted that there is a large number of companies registered in this classification, but that they move a relatively small portion of resources, averaging R$ 300 million per month.
Subsequently, the Central Bank applied a filter to identify companies that are not classified in the appropriate economic sector. Based on these criteria, 56 companies were identified that received a total of R$ 20,8 billion in transfers in August.
The identification was made based on internet citations and the application of filters with characteristics typical of betting transfers, such as the number of people who made transfers, the number of transactions, the average ticket size, and the concentration of transfers at certain times.
“Many of the companies that operate online gambling and betting do so under names that do not match those publicized in the media, and several of them are not correctly classified in the appropriate economic sector. This requires careful identification. Furthermore, many of these companies do not operate exclusively in the betting sector and may be replaced over time, which makes the analysis even more complex.”
On Tuesday morning, the president of the Central Bank, Roberto Campos Neto, had already warned about the accelerated growth of gambling in the country, which he considers worrying, especially regarding the increase in household defaults. He said it is the responsibility of the institution to bring this concern to the government's attention.
“The correlation between people receiving Bolsa Família [a Brazilian social welfare program], low-income individuals, and the increase in betting has been quite strong. We can map what Pix [Brazilian instant payment system] transactions have had on these platforms, and the growth from January to now has been quite significant. We look at the average ticket price, and it has increased by more than 200%. This is something that draws attention, and we are beginning to perceive that it will have an effect on default rates at the point of sale,” he commented.
The government is also aware of the problem. Last week, Finance Minister Fernando Haddad said that the government will address the “psychological dependence on gambling” in the country. The Finance Ministry will block online betting companies that have not yet become properly registered, starting October 1st.
Bettors profile
The Central Bank estimated that around 24 million individuals participated in gambling and betting, making at least one transfer via Pix to these companies during the analyzed period.
Regarding the profile of bettors, most are between 20 and 30 years old, although bets are placed by individuals of different age groups. The average monthly value of transfers increases with age: for younger bettors, the value is around R$ 100 per month, while for older bettors it exceeds R$ 3.000 per month, according to data from August 2024.
These figures originate from an initial survey conducted by the Central Bank, based on estimates of the amounts wagered in August 2024 from transactions via Pix. To identify individuals with significant financial vulnerability, information from beneficiaries of the existing program in December 2023 was used. Approximately 17% of those registered placed bets during that period.
According to the Central Bank, the results are in line with other surveys that indicate low-income families as the most affected by sports betting activity.
"It is reasonable to assume that the commercial appeal of getting rich through gambling is more attractive to those in a situation of financial vulnerability. The Central Bank is attentive to the issue and still needs more data and time to more robustly assess its implications for the economy, financial stability, and the financial well-being of the population." (With Globo Online and Folha de S.Paulo)
