In this guide
Key takeaway: Regulatory frameworks for prediction markets differ substantially across regions. The United States operates through CFTC oversight of licensed venues, the European Union classifies them as financial instruments under MiCA requirements, and numerous Asian jurisdictions enforce strict prohibitions. Checking your jurisdiction's specific rules before participating is critical.
The prediction market regulation environment has transformed considerably over the last twenty-four months. Once occupying ambiguous legal territory, the sector now features increasingly defined rules with distinct regional outcomes. This overview outlines the current regulatory landscape as it stands in mid-2026.
United States: The CFTC Era
Since 2023 enforcement actions, the Commodity Futures Trading Commission (CFTC) has served as the principal regulatory body overseeing prediction markets in America. 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 operations. American users have since been restricted from accessing the platform directly
- Legislative momentum — lawmakers proposed various measures during 2025-2026 aimed at broadening the permissible scope of prediction markets beyond election-related contracts
European Union: MiCA Framework
The Markets in Crypto-Assets (MiCA) regulation became fully operational in December 2024, establishing the EU's approach. Prediction markets employing cryptocurrency tokens fall under crypto-asset services classification, demanding:
- Registration as a Crypto-Asset Service Provider (CASP)
- Adherence to safeguarding standards, identity verification protocols, and reserve requirements
- Technical documentation for tokens designated as asset-referenced instruments
To date, no leading prediction market has achieved complete MiCA authorisation, though applications remain under review in France and Germany.
United Kingdom
The UK Financial Conduct Authority (FCA) evaluates prediction markets individually based on their characteristics. Platforms categorised as gaming operations come under the UK Gambling Commission's purview; those structured as financial derivatives fall within FCA jurisdiction. Betfair's event-based offerings hold a gambling licence, whereas emerging blockchain-based platforms encounter regulatory uncertainty.
Asia-Pacific
- Japan — prediction markets remain prohibited under gambling statutes (Penal Code Articles 185-187), except where explicitly authorised by the state lottery system
- South Korea — likewise banned pursuant to the National Sports Promotion Act and Criminal Act provisions
- Australia — subject to state-level gaming rules. The Interactive Gambling Act 2001 (as amended in 2017) blocks foreign operators from serving Australian users
- Singapore — the Remote Gambling Act 2014 restricts access to most internet-based prediction markets
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
Prospective traders should confirm three essential points before committing capital: (1) Does your location permit the platform you wish to use? (2) What tax implications arise from your profits? (3) What safeguards protect your funds in case of platform insolvency? Our prediction market tax guide offers comprehensive coverage of these considerations.
PolyGram delivers streamlined access to Polymarket positions with integrated performance tracking and straightforward fund retrieval options. Start trading on PolyGram →