Brazil has banned 27 platforms operating under so-called “prediction market” models after authorities determined they were effectively offering unlicensed betting services.
Following an inquiry that discovered these businesses were advertising their services as either investments or derivatives based on betting, the Ministry of Finance made the declaration about the organizations being prohibited from developing their business operations in Brazil.
Each of these banned sites enabled their customers to gamble on numerous real-life circumstances including: upcoming elections; economic trends; results of sports events; outcomes of television shows; and international relations.
The prohibition coincides with a recent National Monetary Council resolution passed on April 24 that confined derivative trading to economic and financial indicators monitored by the Securities and Exchange Commission.
Officials also stated that the business models from these organizations are “operating at the fringes of the finance industry,” and do not conform to any of the business standards necessary to qualify for a licensed betting operation or regulated financial establishment.
Furthermore, officials speculated regarding the risk of clients potentially becoming over-indebted.
The ban will take effect upon both domestic and international companies banned by this announcement, including Kalshi and Polymarket. As a result of this decision, consumers in Brazil will have restricted access to the services these companies offer.
For all of these companies, this decision will gravely alter the trend of how Brazil has responded to new betting-like models, as companies that are impacted by this restriction will now be required to comply with local regulations or leave the Brazilian market.
