In this guide
Key takeaway: Regulatory frameworks for prediction markets diverge significantly across regions. The United States has adopted a CFTC-supervised approach, the European Union classifies them as financial instruments under MiCA, whilst numerous Asian jurisdictions enforce comprehensive prohibitions. Checking your jurisdiction's specific requirements is critical before participating in any market.
The prediction market regulation environment has undergone substantial transformation over the last twenty-four months. Once occupying murky legal territory, the sector now features increasingly defined rules with distinct regional outcomes. This article surveys the international regulatory landscape as it stands in mid-2026.
United States: The CFTC Era
Since its 2023 enforcement initiatives, the Commodity Futures Trading Commission (CFTC) has served as the principal US overseer. Notable milestones include:
- Kalshi — holds full CFTC registration as a designated contract market (DCM), lawfully providing event-based contracts to American participants
- Polymarket — reached a settlement with the CFTC in 2022 following unlicensed operation. Consequently, American participants cannot access the platform directly
- Legislative momentum — lawmakers tabled numerous proposals during 2025-2026 seeking to broaden the permissible scope of prediction markets beyond election-related events
European Union: MiCA Framework
Since its full implementation in December 2024, the Markets in Crypto-Assets (MiCA) regulation establishes the EU's governing structure. Prediction markets employing cryptographic tokens fall under crypto-asset services classification, mandating:
- Licensure as a Crypto-Asset Service Provider (CASP)
- Adherence to investor safeguards, anti-money-laundering protocols, know-your-customer requirements, and reserve obligations
- Technical documentation for tokens designated as asset-referenced instruments
To date, no leading prediction market has secured comprehensive MiCA authorisation, though several entities maintain active applications with regulators in France and Germany.
United Kingdom
The UK Financial Conduct Authority (FCA) evaluates prediction market operators individually. Venues categorised as gambling activity operate under the UK Gambling Commission's purview; those categorised as financial derivatives fall under FCA jurisdiction. Betfair's event offerings function under a gambling licence, whereas emerging blockchain-based competitors navigate uncertain regulatory terrain.
Asia-Pacific
- Japan — prediction markets face an effective prohibition under gambling statutes (Penal Code Sections 185-187), with restricted carve-outs for state-sanctioned lottery schemes
- South Korea — likewise restricted under the National Sports Promotion Act and Criminal Act provisions
- Australia — subject to state-based gambling rules. The Interactive Gambling Act 2001 (as amended in 2017) blocks offshore operators from serving Australian users
- Singapore — the Remote Gambling Act 2014 restricts operation of internet-based prediction market services
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 these essentials: (1) Does your location permit the platform's operation? (2) What fiscal implications arise from your market gains? (3) What safeguards protect your funds should the operator encounter difficulties? For comprehensive tax information, consult our prediction market tax guide.
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