Brazil’s government blocked access to Polymarket and Kalshi, part of a crackdown on prediction market platforms it said were out of compliance with federal gambling laws.
A total of 27 sites were blocked for offering “illegal betting,” Finance Minister Dario Durigan said at a Friday news conference in Brasilia, after the government published a resolution banning prediction markets tied to elections, sports and other events.
Durigan cast the move as part of a broader effort to protect the savings of Brazilians and address rising levels of household debt, a problem President Luiz Inacio Lula da Silva has attributed in part to online gambling.
“We have advocated for stricter enforcement and very rigorous regulation, which will continue to advance, so that we can curb the negative externalities and social harm that unregulated gambling causes to the Brazilian population,” Durigan said.
Polymarket didn’t immediately respond to a request for comment. A spokesperson for Kalshi said it is reviewing the resolution.
Prediction markets like those offered by Polymarket have exploded in popularity in recent years, offering users the chance to trade on sporting events, election outcomes, economic data releases and even the return of Jesus Christ. Kalshi, one of the largest platforms, was co-founded by a Brazilian and recently announced plans to expand to customers in Latin America’s largest nation.
But the sites have also faced questions about potential insider trading and broad access to online betting, and Brazil is now among a growing list of nations applying legal scrutiny to them.
Countries like France, Hungary and Portugal have banned locals from trading on Polymarket in recent years, with regulators stating that its wagers fall under gambling rules and the company was thus operating without appropriate licensing.
State regulators in the US have also tried to shut down prediction markets, accusing them of offering unlicensed gambling. But the Commodity Futures Trading Commission, which governs the industry, has pushed back against states in court.
The resolution issued by Brazil’s National Monetary Council, which includes members of the government and central bank, prohibited the trading of derivatives whose underlying assets are linked to sporting events, online gambling and “real or virtual events of a political, electoral, social, cultural or entertainment nature.”
But unlike restrictions in other countries, it carved out an allowance for certain contracts. Bets tied to economic-financial benchmarks, for example, may be permitted at the discretion of securities regulator CVM.
The South American country’s main stock exchange, B3 SA, has explored entering the growing prediction-markets space. The exchange has already confirmed it will launch six new contracts on April 27 tied to the Ibovespa equity index, Brazil’s real currency and Bitcoin, and has studied expanding the offering to include event-based contracts.
Among the possibilities under consideration are products linked to elections. B3 has previously sought a legal opinion on whether Brazilian law allows contracts tied to electoral outcomes.
Such contracts could have been introduced ahead of the country’s October presidential election, a race expected to be closely contested between the leftist Lula and Senator Flavio Bolsonaro. Recent polls show the two running neck-and-neck in a potential runoff.
The new resolution, however, prohibits that practice. The council tasked CVM, the country’s securities and exchange commission, with issuing additional regulations and overseeing enforcement of the new framework.
