In this guide
Key takeaway: Regulatory frameworks for prediction markets differ substantially across regions. The United States has adopted a CFTC-regulated approach, the European Union classifies them as financial instruments under MiCA, whilst numerous nations in Asia enforce comprehensive prohibitions. Checking your jurisdiction's specific requirements before participating is crucial.
The prediction market regulation environment has transformed considerably over the last twenty-four months. Once positioned in a murky legal space, the sector now features increasingly defined rules with distinct regional winners and losers. This overview charts the international regulatory landscape as it stands in mid-2026.
United States: The CFTC Era
Since its 2023 enforcement actions, the Commodity Futures Trading Commission (CFTC) has served as the principal American authority. Notable milestones include:
- Kalshi — holds full CFTC registration as a designated contract market (DCM), lawfully providing event contracts to American participants
- Polymarket — reached a settlement with the CFTC in 2022 following unauthorised operation. Subsequently, American users cannot access the platform directly
- Legislative momentum — numerous proposals tabled during 2025-2026 seek to broaden the permissible scope of prediction markets beyond election-focused offerings
European Union: MiCA Framework
The Markets in Crypto-Assets (MiCA) regulation became fully operational in December 2024, establishing the EU's governing structure. Prediction markets utilising cryptocurrency tokens fall under crypto-asset services rules, mandating:
- Registration as a Crypto-Asset Service Provider (CASP)
- Adherence to investor safeguards, anti-money laundering protocols, identity verification, and reserve requirements
- Technical documentation for tokens classified as asset-referenced instruments
To date, no prominent prediction market platform has secured complete MiCA authorisation, though several maintain active applications in France and Germany.
United Kingdom
The UK Financial Conduct Authority (FCA) evaluates prediction markets individually based on their characteristics. Platforms categorised as gambling activities operate under the UK Gambling Commission's remit; those structured as financial derivatives fall within FCA oversight. Betfair's event-based markets function under gambling licensing, whereas emerging crypto-denominated services encounter regulatory uncertainty.
Asia-Pacific
- Japan — prediction markets remain prohibited under gambling statutes (Penal Code Sections 185-187), with limited carve-outs for state-sanctioned lottery schemes
- South Korea — likewise restricted through the National Sports Promotion Act and broader Criminal Code provisions
- Australia — falls under state-administered gambling rules. The Interactive Gambling Act 2001 (updated 2017) prevents offshore operators from serving Australian customers
- Singapore — the Remote Gambling Act 2014 restricts the majority of internet-based prediction market activity
Country-by-Country Status Table
| Country | Status | Key Regulator |
| USA | Legal (regulated) | CFTC |
| EU (MiCA) | Legal with CASP license | National CAs + ESMA |
| UK | Grey area | FCA / Gambling Commission |
| Japan | Banned | National Police Agency |
| Australia | Restricted | ACMA |
| Canada | Provincial regulation | Provincial gaming authorities |
What This Means for Traders
Prior to establishing any position on a prediction market, confirm the following: (1) Does your location permit the platform to operate legally? (2) What fiscal obligations arise from your gains? (3) What safeguards protect your capital if the operator encounters difficulties? For comprehensive guidance on tax implications, consult our prediction market tax guide.
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