In this guide
Key takeaway: Regulatory frameworks governing 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 nations across Asia enforce comprehensive prohibitions. Traders must verify compliance requirements in their own jurisdiction before participating.
The prediction market regulation environment has undergone substantial transformation over recent years. Once occupying murky legal territory, the sector now features increasingly defined rules with distinct regional winners and losers. This overview surveys 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 regulatory body overseeing prediction markets in America. Notable regulatory milestones include:
- Kalshi — holds full CFTC registration as a designated contract market (DCM), permitting lawful distribution of event-based contracts to American participants
- Polymarket — reached a settlement with the CFTC in 2022 following unauthorised operations. American users have since been prevented from accessing the platform directly
- Legislative momentum — lawmakers introduced various proposals throughout 2025-2026 aimed at broadening the permissible scope of prediction market activity beyond election-related contracts
European Union: MiCA Framework
Since its complete implementation in December 2024, the Markets in Crypto-Assets (MiCA) regulation establishes the governing structure across the EU. Prediction markets employing cryptographic 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 capital standards
- Publication of technical documentation for tokens designated as asset-referenced instruments
To date, no leading prediction market has secured full MiCA authorisation, although several entities have submitted applications with French and German regulators.
United Kingdom
The UK Financial Conduct Authority (FCA) evaluates prediction market operators individually. Platforms categorised as gaming activities fall under the Gambling Commission's remit; those categorised as derivative instruments fall under FCA oversight. Betfair's event-based offerings operate under a gaming licence, whilst emerging token-based platforms navigate uncertain regulatory pathways.
Asia-Pacific
- Japan — prediction markets remain effectively prohibited under gambling statutes (Penal Code Sections 185-187), save for state-sanctioned lottery operations
- South Korea — likewise restricted by the National Sports Promotion Act and broader Criminal Act provisions
- Australia — subject to jurisdiction-specific gaming rules. The Interactive Gambling Act 2001 (as amended in 2017) blocks foreign platforms from operating locally
- Singapore — the Remote Gambling Act 2014 restricts the vast majority of internet-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
Prior to committing capital on any prediction market platform, confirm the following: (1) Does the operator hold proper licensing within your territory? (2) What fiscal obligations arise from your earnings? (3) What recourse or protections exist should the operator become insolvent? Our prediction market tax guide offers comprehensive coverage of these considerations.
PolyGram grants seamless access to Polymarket liquidity alongside integrated portfolio tracking and streamlined fund withdrawal options. Start trading on PolyGram →