Brazil Bans Polymarket, Kalshi Citing Investor Protections

Brazil has enacted a sweeping ban on prediction markets and betting platforms, according to local media and government filings. The two leading prediction markets, Polymarket and Kalshi, were inaccessible to researchers in the country. Finance Minister Dario Durigan stated that approximately 28 platforms were banned in total as part of a broader governmental effort to protect the savings of Brazilians amid a rise in online gambling.

## Regulatory Justification

In a resolution published by the Banco Central do Brasil, the platforms were cited as non-compliant with local regulations on derivatives trading and as raising risks for investor protections and market integrity. The central bank's resolution specifically prohibited the offering and trading of derivative contracts whose underlying assets are related to real sporting events, virtual online gaming events, and real or virtual events of a political, electoral, social, cultural, entertainment, or any other nature that, at the discretion of the Securities and Exchange Commission, is not representative of an economic or financial benchmark.

## Global Restrictions on Prediction Markets

Polymarket is blocked by over 30 countries around the world, according to its documentation, including OFAC restrictions and national bans. In January, Portugal moved to restrict the platform, following similar moves by France, Belgium, Australia, the UK, Italy, Poland and Singapore, among others. In some countries, only specific markets are banned, such as political betting in Taiwan.

## U.S. Regulatory Context

The United States historically prevented for-profit prediction markets until Kalshi successfully sued the Commodity Futures Exchange Commission for blocking its election markets in 2024, opening the gate for platforms like Polymarket to reenter the country. Today, the CFTC takes a permissive view of prediction markets and is currently suing several states that are looking to ban the nascent sector.

As of Friday, Wisconsin is the most recent state to lodge a lawsuit against Kalshi, Robinhood, Coinbase, Polymarket, and Crypto.com, alleging their sports event contracts violate the state's commercial gambling ban.