In this guide
Key takeaway: Regulatory frameworks for prediction markets differ substantially across regions. The United States has adopted a CFTC-regulated model, the European Union classifies them as financial instruments under MiCA, whilst numerous jurisdictions in Asia enforce comprehensive prohibitions. Checking your jurisdiction's specific requirements before participating is critical.
The prediction market regulation environment has undergone substantial transformation over recent years. Previously occupying a regulatory void, the sector now features clearly defined rules with distinct regional winners and losers. This overview examines the international regulatory landscape as it stands in mid-2026.
United States: The CFTC Era
Since its enforcement initiatives in 2023, the Commodity Futures Trading Commission (CFTC) has emerged as the dominant US authority. Notable regulatory developments include:
- Kalshi — holds full CFTC registration as a designated contract market (DCM), lawfully offering event contracts to American participants
- Polymarket — reached a settlement with the CFTC in 2022 following unauthorised operations. Consequently, American participants cannot access the platform directly
- Legislative momentum — lawmakers have tabled various proposals during 2025-2026 aimed at broadening the permissible scope of prediction market activities beyond election-focused contracts
European Union: MiCA Framework
The Markets in Crypto-Assets (MiCA) regulation entered full force in December 2024, establishing the EU's regulatory structure. Prediction markets employing crypto tokens fall within the crypto-asset services category, necessitating:
- Registration as an authorised Crypto-Asset Service Provider (CASP)
- Adherence to investor safeguards, anti-money laundering protocols, and prudential standards
- Publication of technical documentation for tokens classified as asset-referenced instruments
To date, no leading prediction market has secured full MiCA authorisation, though multiple operators have submitted applications in France and Germany.
United Kingdom
The UK Financial Conduct Authority (FCA) evaluates prediction markets individually. Operators classified as gambling providers operate under the UK Gambling Commission framework; those offering financial derivatives fall under FCA oversight. Betfair's event offerings function under gambling licensing, whereas emerging blockchain-based platforms navigate considerable regulatory uncertainty.
Asia-Pacific
- Japan — prediction markets face effective prohibition under gambling statutes (Penal Code Articles 185-187), with limited carve-outs for state-sanctioned lottery schemes
- South Korea — comparable restrictions apply via the National Sports Promotion Act and Criminal Act provisions
- Australia — subject to state-based gambling rules. Overseas operators face blocking under the Interactive Gambling Act 2001 (as amended in 2017)
- Singapore — the Remote Gambling Act 2014 restricts the majority of web-based prediction market offerings
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
When entering any prediction market position, confirm three essential points: (1) Does your jurisdiction permit the platform's operations? (2) What fiscal implications arise from your earnings? (3) What safeguards protect your funds if the operator encounters difficulties? Our prediction market tax guide offers comprehensive coverage of these considerations.
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