Brazil tackles predictive markets with Kalshi and Polymarket in its sights

Brazil is tightening its control over prediction markets linked to crypto and financial betting. The authorities have initiated the blocking of 27 platforms, including Kalshi and Polymarket. This measure comes after a directive from the Ministry of Finance and an action by the National Telecommunications Agency. According to the authorities, these services do not respect the current legal framework. The issue therefore goes beyond the sole crypto question. It also affects gambling, user protection and financial stability.

Brazil tightens its legal framework on predictive markets

Brazilian authorities have initiated the closure of 27 prediction market platforms, including Kalshi and Polymarket. Announced Friday, this decision follows a directive from the Ministry of Finance and an enforcement measure from the National Telecommunications Agency, Anatel, according to Agência Brasil.

The authorities believe that these services do not fall under the current Brazilian legal framework. They therefore consider them illegal. This measure marks a tougher crackdown on predictive market platforms operating without authorization in the country.

Dario Durigan, the Brazilian Minister of Finance, justified this decision by the lack of rules which has long surrounded this sector in Brazil. He declared during a press conference at the Presidential Palace:

We have closely followed the evolution of this sector in Brazil, which experienced a period of anarchy due to the absence of rules and control, from 2018 to 2022.

Dario Durigan, Brazilian Minister of Finance

This decision comes after the publication of the resolution 5.298 of the National Monetary Board on Friday. The text, expected at the beginning of May, prohibits contracts linked to sport, politics, entertainment or social events. On the other hand, contracts linked to economic indicators will remain authorized, under financial supervision.

Prediction markets and household debt

Furthermore, Dario Durigan believes that prediction markets can increase household debt and expose users to high financial risks. According to him, this monitoring is part of a broader strategy to reduce the debt of families, small businesses and students.

As we work to reduce debt among families, small businesses and students, we must also prevent the emergence of new forms of harmful debt.

Dario Durigan, Brazilian Minister of Finance

The blocked platforms bring together international services and players focused on Brazil. The list includes Kalshi, Polymarket, PredictIt, Robinhood, via its forecasting function, and Fanatics Markets. Other platforms are also affected, such as ProphetX, Hedgehog Markets, Novig, Polyswipe, PRED Exchange and Stride. Local services, including Palpita, Cravei, Previsao and MercadoPred, are also among the targeted platforms.

International legal framework: Brazil follows a broader trend

Brazil is part of an international trend of controlling prediction markets. In Europe, France, Belgium and the Netherlands have already blocked or sanctioned platforms operating without authorization. These services are often compared to gambling or unapproved financial products.

In the United States, the framework remains more fragmented. Federal regulators and states do not always adopt the same reading, which fuels tensions around platforms like Kalshi or Polymarket. In this context, Brazil is adopting a more direct approach: blocking access deemed illegal and only authorizing contracts linked to economic indicators.

This line could inspire other emerging markets, facing the same challenges of innovation, consumer protection and financial stability. In the short term, platforms will have to prove their compliance in the Brazilian crypto market, while unsupervised players risk leaving the country.