Brazil Bans Prediction Markets, Blocking Kalshi and Polymarket

In a conference that highlighted prediction markets in Brazil, the authorities stated that these platforms are illegal in the country. Prediction markets, which in the US provide alternative peer betting products for real world events and sports, fall outside the framework of Brazil’s legal sports betting. It is not just the sports-related markets here, but also the political, electoral, financial, entertainment and cultural events which are not going to be tolerated.

Already, since April 24 when the announcement was live streamed from the National Monetary Council, a service provider, Anatel, went ahead and blocked 28 prediction market sites. Brazil has had legal sports betting since 2025, and since the market launch, the regulation has continuously tightened. The ruling does not just promise to impact the betting sector, but can also spill out into the crypto market in Brazil, and risks pushing bettors away from fears of overregulation.

Brazil Bans Prediction Markets

Brazil has made its position on prediction markets abundantly clear here. It has not just written off the sports-related products that have proven controversial in the US. No, the Brazilian authorities have decided that prediction markets, in their entirety, are not legal in Brazil and will not be tolerated. Sites like Kalshi and Polymarket have already been banned, alongside 25+ other prediction market platforms.

Since Brazil legalized online sports betting in 2025, the country has just tightened the framework of those laws and made it more restrictive for operators and players alike.

The council decided that prediction markets do not comply with the regulation for sports betting. They are not eligible for regulation, and this is then defined as non-compliance in the eyes of the law. Prediction markets were presented as a security risk, and having all the characteristics of betting, they were ultimately excluded from Brazil’s scope of offering.

Next, the enforcement. The National Consumer Secretary went on to advise players to pick regulated sites – easily recognizable by the mandated bet.br domain. Prediction markets, on the other hand, will be treated like black market operators, and their domains will be banned in Brazil. And that is not an empty threat, Brazil has banned over 39,000 unregulated betting sites since January 2025.

Prediction Markets in South America

Brazil is not just one of the most important players in the LATAM iGaming and mobile sports betting markets. It is also one of the most prominent users of cryptocurrencies, not by legislation but through public adoption. In figures, Brazil processed over $318 billion from July 2024 to June 2025, which was around a third of the continent’s total processing volume. And 90% of that transactional volume was in stablecoins.

This is important because platforms like Polymarket use stablecoins as their internal currencies, without using local currencies. It is a bit like native crypto casinos – you aren’t gaming for Brazilian Real or US Dollars, but BTC, ETH, LTC, XRP, and stablecoin tokens like USDT, USDC, and so on.

Amid the ongoing online sports betting reforms, Brazil recently clamped down on payment providers. It banned credit cards, cash in hand, cheques, and Brazil made cryptocurrency payments illegal for sports betting vendors. This ruling essentially cut off platforms like Polymarket.

Global Legal Trends on Prediction Markets

Prediction markets largely took off across the US in 2025, and their popularity has not been shaken a year on. Long established platforms like Kalshi and Polymarket dominate the scene, and conventional US sportsbooks like DraftKings, FanDuel and Fanatics who were originally against prediction markets, made a 180-degree turn and launched their own prediction markets: Fanatics Markets, DraftKings Predictions and FanDuel Predicts.

In Europe, prediction markets remain contentious territory. There is no EU standard for prediction markets, and they are either ignored, unregulated or made illegal across the continent. That is, until Malta expressed interest in regulating prediction markets a few weeks ago. A little after that, Gibraltar announced the first regulated prediction market in Europe, Predict Street.

The UKGC, which has been managing pressing tax hikes and tightening player safety regulation, also extended its oversight to prediction markets, classing them as betting exchanges, requiring a Betting Intermediary Licence. However, the laws on prediction markets across Europe are highly fragmented and even lawmakers cannot fully decide whether they should be classified as sportsbooks, financial exchanges, or betting exchanges – none of which fully describe what prediction markets actually offer.

US Federal vs State Legal Issues

Back to the US, prediction markets are regulated in an entirely different way. They fall under the legal purview of the Federal Government, more specifically the Commodity Futures Trading Commission, through which they can obtain Designated Contract Markets licenses. This is all and well, but there is a conflict of interests with their sports-related contract markets.

Because sports betting is legal at a federal level, but each state has the autonomy to launch and regulate betting sectors of its own, and there are still states that haven’t yet done this. Where there are legal online sports betting markets, the state has no control over prediction markets – which are regulated (and taxed) by the Federal Government agencies. And so, 2025 and now 2026 have been littered with court cases between state lawmakers and prediction markets.

These are still ongoing, amid controversies about problem gambling, advertising exposure, insider trading claims, and other regulatory issues circling around prediction markets.

Brazil’s Sports Betting Industry

It makes sense that Brazil doesn’t want to get involved, and banning prediction markets outright is an option that many other countries have taken. Since Brazil legalized sports betting, it has slowly tightened the rules, focusing on taxation, responsible gambling initiatives, and blocking illegal sites.

It introduced the bet.br domain structure, with licensing requirements that raise the entry barrier for operators, limit payment options, and reduce the potential to introduce new products. Especially those that fall outside traditional sports betting, like prediction markets or peer to peer betting functionalities.

There is little room for any hybrid products or inventiveness from operators, and through rising taxes and restricted marketing channels, Brazil is looking for a highly controlled sports betting sector. Prediction markets, with the whirlwind of regulatory overlaps and blind spots, would complicate the framework tremendously.

Risks of Overregulation

The problem with enforcing too much control and limiting the options is that it can drive customers away. The licensed sportsbooks have the perk of winning over customers because of their safety protocols and legitimacy. You wouldn’t question the reliability or trustworthiness of a locally licensed online sportsbook as you would an offshore betting site. But these licensed books are still expected to somehow compete with these non-locally licensed platforms.

Sites that can provide larger bonuses, more hybrid products and innovative games, and for sports betting, lower juice on their wagers. The black market is a real issue, and now that prediction markets have become part of that – with site blocks and all – this will just make it more difficult for locally licensed operators to win over customers. The banning of cryptocurrency payment methods also limits Brazil’s role in the emerging fintech innovation and developing Web3 spaces.

It risks overregulation, where Brazil could have reshaped how and where users engage with these markets, they have taken another route and cut them off entirely. In the short run, it brings clarity because Brazil has drawn a very clear line, but the trends around the world seem to point to more countries adopting prediction markets or looking for ways to regulate them. Brazil could fall behind here, and inadvertently push any potential traffic outside the regulated scope to other sites. For now, prediction markets are banned, but it does not necessarily mean this is the end of these products in Brazil, nor in South America.