In this guide
Key takeaway: Regulatory approaches to prediction markets differ substantially across the globe. The United States has adopted a CFTC-regulated model, the European Union classifies them as financial instruments under MiCA, whilst numerous jurisdictions in Asia enforce comprehensive prohibitions. Traders must familiarise themselves with applicable local legislation before participating.
The prediction market regulation environment has undergone substantial transformation over recent years. Once occupying murky legal territory, the sector now features increasingly defined rules with distinct geographical winners and losers. This overview surveys the worldwide regulatory landscape as it stands in mid-2026.
United States: The CFTC Era
Since its 2023 enforcement campaign, the Commodity Futures Trading Commission (CFTC) has served as America's principal regulator. Notable recent developments 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 following unauthorised operations. American participants have since been restricted from accessing the platform directly
- Legislative momentum — several proposals tabled during 2025-2026 seek to broaden the legal scope of prediction markets beyond election-focused activities
European Union: MiCA Framework
The Markets in Crypto-Assets (MiCA) regulation, which came into full force in December 2024, establishes the EU's approach. Platforms offering prediction markets via cryptocurrency tokens fall under crypto-asset services rules, necessitating:
- Registration as a Crypto-Asset Service Provider (CASP)
- Adherence to investor safeguards, anti-money-laundering protocols, identity verification, and prudential standards
- Technical documentation for tokens designated as asset-referenced instruments
To date, no leading prediction market has secured complete MiCA authorisation, though several maintain active licensing applications across French and German regulators.
United Kingdom
The UK's Financial Conduct Authority (FCA) evaluates prediction market platforms individually. Operators classified as gambling venues answer to the UK Gambling Commission; those structured as financial derivatives fall under FCA oversight. Betfair's event-based offerings function under gambling authorisation, whilst emerging blockchain-based competitors navigate uncertain regulatory pathways.
Asia-Pacific
- Japan — prediction markets face effective prohibition under gambling statutes (Penal Code Sections 185-187), with restricted exemptions for state-sanctioned lottery schemes
- South Korea — likewise outlawed via the National Sports Promotion Act and Criminal Act provisions
- Australia — subject to state-based gambling rules. Overseas platforms encounter barriers under the Interactive Gambling Act 2001 (as revised 2017)
- Singapore — the Remote Gambling Act 2014 blocks the majority of web-based prediction market offerings
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
Prior to initiating any trade on a prediction market, confirm these essentials: (1) Does your jurisdiction permit the platform's operations? (2) Which tax rules govern your returns? (3) What safeguards protect your funds should the operator encounter difficulties? Our prediction market tax guide offers comprehensive coverage of these considerations.
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