In this guide
Key takeaway: Regulatory frameworks for prediction markets differ substantially across regions. The United States has adopted a CFTC-supervised approach, the European Union classifies them as financial instruments under MiCA, whilst numerous jurisdictions in Asia enforce comprehensive prohibitions. Checking your jurisdiction's specific requirements before participating is critical.
The prediction market regulation environment has transformed significantly over the last twenty-four months. Once occupying murky legal territory, the sector is now crystallising into a structured ecosystem with distinct regional patterns. This overview surveys the current regulatory position globally as we move through 2026.
United States: The CFTC Era
Since its 2023 enforcement campaign, the Commodity Futures Trading Commission (CFTC) has emerged as the dominant regulatory body in America. Notable milestones include:
- Kalshi — holds full CFTC registration as a designated contract market (DCM), permitting lawful distribution of event contracts to American participants
- Polymarket — reached a settlement with the CFTC in 2022 after operating without proper authorisation. American users have subsequently been prevented from accessing the platform directly
- Legislative momentum — various proposals tabled in 2025-2026 seeking to broaden the permissible scope of prediction markets beyond election-related instruments
European Union: MiCA Framework
Since its full implementation in December 2024, the Markets in Crypto-Assets (MiCA) regulation establishes the EU's approach. Prediction markets employing cryptographic tokens fall under crypto-asset services, mandating:
- Registration as an authorised Crypto-Asset Service Provider (CASP)
- Adherence to investor safeguards, anti-money laundering protocols, identity verification, and reserve obligations
- Technical documentation for tokens designated as asset-referenced instruments
To date, no leading prediction market has secured complete MiCA authorisation, though several entities have filed applications with regulators in France and Germany.
United Kingdom
The UK Financial Conduct Authority (FCA) evaluates prediction markets individually based on their characteristics. Operators classified as gambling enterprises report to the UK Gambling Commission; those offering financial derivative products answer to the FCA. Betfair's event-based offerings operate under a gambling permit, whereas emerging blockchain-based competitors navigate an ambiguous regulatory environment.
Asia-Pacific
- Japan — prediction markets remain prohibited under gambling statutes (Penal Code Sections 185-187), with restricted carve-outs for state-sanctioned lottery schemes
- South Korea — likewise prohibited via the National Sports Promotion Act and Criminal Code provisions
- Australia — subject to state-based gambling rules. Offshore operators face blockage under the Interactive Gambling Act 2001 (as revised in 2017)
- Singapore — the Remote Gambling Act 2014 restricts most internet-based prediction market activities
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 regulator permit the platform to operate in your territory? (2) What tax implications arise from your profits? (3) What safeguards protect your funds if the operator faces insolvency? Our prediction market tax guide covers these considerations in depth.
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