In this guide
Key takeaway: Regulatory frameworks governing prediction markets differ substantially across regions. The United States has adopted a CFTC-supervised approach, the European Union classifies them as financial instruments under MiCA, whilst numerous jurisdictions across Asia enforce comprehensive prohibitions. Checking your jurisdiction's specific requirements before participating is critical.
The prediction market regulation environment has undergone substantial transformation over the last twenty-four months. Once occupying murky legal territory, the sector is now crystallising into a structured ecosystem with distinct regional winners and constraints. This overview charts the international regulatory landscape as it stands in 2026.
United States: The CFTC Era
The Commodity Futures Trading Commission (CFTC) has served as the dominant US regulatory authority following its enforcement campaign in 2023. Notable milestones include:
- Kalshi — holds full CFTC registration as a designated contract market (DCM), legitimately offering event-based contracts to American participants
- Polymarket — reached a settlement with the CFTC in 2022 for unauthorised operation. Subsequently, American users cannot directly access the platform
- Legislative momentum — numerous proposals advanced during 2025-2026 aimed at broadening the permitted scope of prediction markets beyond election-focused contracts
European Union: MiCA Framework
The Markets in Crypto-Assets (MiCA) directive, operational throughout the EU since December 2024, establishes the regulatory structure. Prediction markets employing cryptographic tokens fall within crypto-asset services and must satisfy:
- Registration as a Crypto-Asset Service Provider (CASP)
- Adherence to investor safeguards, anti-money laundering protocols, identity verification, and reserve requirements
- Technical documentation for any token categorised as an asset-referenced token
To date, no prominent prediction market has secured 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 gambling operations fall under the UK Gambling Commission's remit; those categorised as financial derivatives fall under FCA oversight. Betfair's event-based markets operate under a gambling licence, whereas emerging blockchain-based platforms navigate an ambiguous regulatory environment.
Asia-Pacific
- Japan — prediction markets face effective prohibition under gambling statutes (Penal Code Sections 185-187), with limited carve-outs for state-sanctioned lottery schemes
- South Korea — likewise restricted under the National Sports Promotion Act and Criminal Act provisions
- Australia — falls under state-based gaming frameworks. Offshore platforms are barred by the Interactive Gambling Act 2001 (revised 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 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 initiating any position on a prediction market, confirm the following: (1) Does your jurisdiction permit the platform to operate? (2) What tax implications arise from your earnings? (3) What safeguards protect your funds in case of platform insolvency? For comprehensive tax guidance, consult our prediction market tax guide.
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