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, and numerous countries 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. Previously an ambiguous legal domain, it has now become an increasingly structured sector with distinct regulatory outcomes depending on geography. This overview surveys the international regulatory landscape as it stands in mid-2026.
United States: The CFTC Era
Since 2023 enforcement actions, the Commodity Futures Trading Commission (CFTC) has emerged as the principal regulatory body in America. Notable milestones include:
- Kalshi — holds full CFTC registration as a designated contract market (DCM), permitting lawful provision of event contracts to American participants
- Polymarket — reached a settlement with the CFTC in 2022 after operating without proper authorisation. Following this agreement, access from the US has been restricted through geo-blocking
- Legislative momentum — various proposals advanced during 2025-2026 seeking to broaden the permissible scope of prediction markets beyond election-related contracts
European Union: MiCA Framework
The Markets in Crypto-Assets (MiCA) directive, operational throughout the EU since late 2024, establishes the regulatory foundation. Platforms offering prediction markets via cryptocurrency tokens face classification as crypto-asset services, necessitating:
- Registration as an authorised Crypto-Asset Service Provider (CASP)
- Adherence to investor safeguards, anti-money laundering protocols, identity verification, and reserve standards
- Publication of technical documentation for tokens designated as asset-referenced instruments
To date, no leading prediction market operator has secured complete MiCA authorisation, though multiple entities have filed applications with regulators in France and Germany.
United Kingdom
The UK Financial Conduct Authority (FCA) evaluates prediction markets individually. Platforms categorised as gambling come under the UK Gambling Commission's remit; those structured as financial derivatives fall within FCA oversight. Betfair's event-based offerings operate pursuant to a gambling licence, whilst emerging blockchain-based competitors navigate considerable regulatory uncertainty.
Asia-Pacific
- Japan — prediction markets remain prohibited under gambling statutes (Penal Code Sections 185-187), save for state-sanctioned lottery schemes
- South Korea — likewise forbidden via the National Sports Promotion Act and Criminal Act provisions
- Australia — subject to state-based gambling controls. The Interactive Gambling Act 2001 (as amended in 2017) prevents foreign operators from serving Australian customers
- Singapore — the Remote Gambling Act 2014 restricts access to virtually all internet-based prediction market offerings
Country-by-Country Status Table
| Country | Status | Key Regulator |
| USA | Legal (regulated) | CFTC |
| EU (MiCA) | Legal with CASP licence | 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 commencing activity on any prediction market, confirm the following: (1) Does your jurisdiction permit the platform to operate legally? (2) Which tax rules govern your earnings? (3) What safeguards protect your capital if the operator encounters difficulties? For comprehensive guidance on taxation matters, consult our prediction market tax guide.
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