Brazil Rejects Prediction Markets in Gambling Crackdown

Brazil is intensifying its efforts against unregulated gambling, making it clear that prediction markets are not permitted under its current framework. Alongside a newly launched public awareness campaign, authorities are emphasizing that betting should not be viewed as a source of income.

The campaign, rolled out through official channels, focuses on the risks associated with gambling, including addiction, financial loss and broader social consequences. A central message is that prediction markets are not financial instruments but instead fall under illegal betting activity.

Regulatory Position Clarified

The initiative follows a decision by Brazil’s financial authorities, which determined that prediction markets function similarly to fixed-odds betting.

The ruling was issued by the National Monetary Council, which oversees the country’s financial system. It concluded that such platforms cannot be classified as financial products.

Under existing regulations, derivatives must be tied to economic variables such as interest rates or inflation. Outcomes related to sports, elections or entertainment do not meet this requirement, effectively removing the legal foundation for prediction markets.

Expansion Attempts Rejected

The issue gained attention when US-based operator Kalshi explored entering the Brazilian market. The company sought to position its offering as a financial product rather than a betting service.

Regulators rejected this approach, stating it blurred the distinction between financial services and gambling. In response, a new resolution was introduced to prohibit derivatives linked to non-financial events, closing any potential entry point for such platforms.

Access Restrictions Introduced

Authorities have also taken steps to restrict access to prediction market services.

Brazil’s telecommunications regulator, ANATEL, has been instructed to block websites offering these products, regardless of whether they are based domestically or internationally.

Financial measures are also being applied to limit transactions involving these platforms, aiming to prevent both deposits and withdrawals.

Focus on Social Impact

The government has linked these actions to concerns about rising household debt and financial strain. Officials believe that speculative betting on event outcomes could worsen these issues.

There are also concerns about markets tied to political or public events, with policymakers highlighting potential wider implications.

This has led to a more cautious regulatory stance, where authorities are defining boundaries early rather than allowing new products to develop unchecked.

Broader Policy Direction

The move aligns with a wider push by President Luiz Inácio Lula da Silva to strengthen oversight of the gambling sector.

Although Brazil only introduced a regulated betting market in 2025, discussions are already underway about further restrictions. These include potential limits on access to betting platforms for individuals receiving government assistance.

Clear Signal to the Market

For operators, the position is unambiguous. Prediction markets will not be recognised as financial instruments in Brazil.

The country is maintaining a clear separation between finance and gambling and any model that attempts to combine the two is unlikely to gain approval under current rules.