Brazil Cracks Down on Prediction Markets, Bans 27 Platforms Including Kalshi and Polymarket

• Brazil has moved to curb prediction markets, restricting platforms and limiting contracts to economic indicators under stricter financial rules.
• Regulators have blocked dozens of platforms, arguing their products resemble gambling and pose risks to household financial stability.
• A new regulatory push narrows derivatives trading, aiming to prevent unregulated betting-style markets from gaining ground.

Brazilian regulators have shut down 27 prediction market platforms, including Kalshi and Polymarket, citing violations of national laws governing financial and betting activities. The enforcement, led by the Finance Ministry and carried out by Brazil’s telecommunications regulator, reflects a broader effort to bring tighter control to a sector authorities say has operated without sufficient oversight.

The decision aligns with new rules issued by the National Monetary Council, which redefine the boundaries of permissible derivatives trading in the country. Under these rules, contracts based on sports, political, cultural, or social outcomes are banned, as regulators view them as comparable to gambling rather than financial products. Only derivatives tied to economic indicators such as inflation, exchange rates, and interest rates will continue to be allowed under regulated conditions.

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Consumer Protection Push

Officials have linked the rise of prediction markets to broader economic concerns, including the risk of increased household debt and financial instability. The government has positioned the crackdown as part of ongoing efforts to reduce financial exposure and safeguard consumers from potentially harmful speculative activities.

Authorities also argued that these platforms had blurred the line between financial instruments and betting, presenting products as securities while functioning similarly to gambling. The regulatory action is intended to prevent further expansion of such markets and ensure that only compliant, authorised financial activities continue within Brazil’s legal framework.

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