In this guide
Key takeaway: Regulatory frameworks for prediction markets differ substantially across regions. The United States has adopted CFTC oversight for licensed operators, the European Union classifies them as financial instruments under MiCA requirements, and numerous countries in Asia enforce strict prohibitions. Checking your jurisdiction's specific rules before participating in any market is crucial.
The prediction market regulation environment has transformed considerably over recent years. Once occupying murky legal territory, the sector now features clearly defined rules with distinct regional winners and losers. This overview charts the international regulatory picture as it stands in mid-2026.
United States: The CFTC Era
Since its enforcement campaign in 2023, the Commodity Futures Trading Commission (CFTC) has emerged as the dominant US overseer. Notable milestones include:
- Kalshi — holds full CFTC registration as a designated contract market (DCM), lawfully providing event contracts throughout the United States
- Polymarket — reached a settlement with the CFTC in 2022 after operating without proper authorisation. American participants have since been restricted from accessing the platform directly
- Legislative momentum — lawmakers tabled numerous proposals during 2025-2026 seeking to broaden the scope of lawful prediction markets beyond election-focused instruments
European Union: MiCA Framework
Since its full implementation in December 2024, the Markets in Crypto-Assets (MiCA) regulation establishes the EU's approach. Prediction markets employing crypto tokens fall under 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 requirements
- Published documentation for tokens classified as asset-referenced tokens
To date, no major prediction market operator has secured full MiCA authorisation, though several have submitted applications in France and Germany.
United Kingdom
The UK Financial Conduct Authority (FCA) evaluates prediction markets individually. Operators classified as gambling venues operate under the UK Gambling Commission; those categorised as financial derivatives answer to the FCA. Betfair's event offerings function under a gambling permit, whereas emerging crypto-native platforms navigate an ambiguous regulatory environment.
Asia-Pacific
- Japan — prediction markets remain effectively prohibited under gambling statutes (Penal Code Articles 185-187), with limited carve-outs for state-sanctioned lottery schemes
- South Korea — likewise forbidden under the National Sports Promotion Act and Criminal Act provisions
- Australia — subject to state-based gambling rules. Overseas operators face blocking measures under the Interactive Gambling Act 2001 (updated 2017)
- Singapore — the Remote Gambling Act 2014 restricts most online prediction market activities
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
Before committing capital to any prediction market, confirm three essentials: (1) Does your location permit the platform's operation? (2) What tax liabilities attach to your returns? (3) What safeguards protect your funds if the operator encounters difficulties? Our prediction market tax guide covers these considerations in depth.
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