Brazil bans Kalshi and Polymarket over derivatives rules

Brazil's central bank published a resolution that bars prediction platforms Kalshi and Polymarket from offering certain derivative contracts in the country. The resolution cited failure to comply with Brazilian rules for derivatives and concerns about investor protection and market integrity.

The central bank's resolution states: “The offering and trading in the country of derivative contracts whose underlying assets are related to the following are prohibited: A real sporting event, virtual online gaming event and a real or virtual event of a political, electoral, social, cultural, entertainment, or any other nature that, at the discretion of the Securities and Exchange Commission, is not representative of an economic or financial benchmark.”

The rule targets derivative contracts tied to sporting events, virtual gaming events and real or virtual political, electoral, social, cultural or entertainment events when those contracts are not considered economic or financial benchmarks under domestic rules.

Finance Minister Dario Durigan announced that 28 platforms had been barred and framed the action as a measure to protect Brazilians' savings amid a rise in online gambling.

Polymarket and Kalshi are among the better-known prediction markets. Polymarket's documentation notes it is blocked in more than 30 countries and some regulators have restricted or limited specific market types, such as political betting.

In the United States, Kalshi sued the Commodity Futures Trading Commission in 2024 over restrictions on its election markets and won a ruling that allowed those markets to operate. The CFTC has since taken a generally permissive approach to prediction markets. Wisconsin has filed a lawsuit alleging that sports-event contracts offered by Kalshi, Robinhood, Coinbase, Polymarket and Crypto.com violate the state's commercial gambling ban.

The resolution applies to offerings made in Brazil and focuses on how derivative contracts are classified under Brazilian law. The announcement bars the specified contracts from being offered to customers in Brazil while the platforms remain noncompliant.