In this guide
Key takeaway: Regulatory treatment of prediction markets differs significantly across the globe. The United States has adopted a CFTC-supervised approach for licensed operators, the European Union classifies them as financial instruments under MiCA rules, whilst numerous countries in Asia enforce comprehensive prohibitions. Checking your jurisdiction's specific requirements before you trade is critical.
The prediction market regulation environment has undergone substantial transformation over the last twenty-four months. Once considered a murky legal space, the sector now features increasingly defined rules with distinct regional winners and losers. This overview surveys the worldwide regulatory picture as it stands in mid-2026.
United States: The CFTC Era
Since its enforcement initiatives in 2023, the Commodity Futures Trading Commission (CFTC) has emerged as the leading regulatory body in America. Notable milestones include:
- Kalshi — holds full CFTC registration as a designated contract market (DCM), legitimately providing event-based contracts to American participants
- Polymarket — reached a settlement with the CFTC in 2022 following unregistered operations. American customers have subsequently been restricted from accessing the platform directly
- Legislative momentum — numerous proposals advanced during 2025-2026 aimed at broadening 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 approach. Prediction markets employing crypto tokens fall under crypto-asset services classification and must satisfy:
- Registration as a Crypto-Asset Service Provider (CASP)
- Adherence to investor safeguards, anti-money-laundering protocols, identity verification, and reserve requirements
- Published documentation for tokens designated as asset-referenced tokens
To date, no leading prediction market has secured complete MiCA authorisation, though several are pursuing approvals in France and Germany.
United Kingdom
The UK Financial Conduct Authority (FCA) evaluates prediction markets individually based on their characteristics. Platforms categorised as gambling operations fall under the UK Gambling Commission's remit; those categorised as financial derivatives fall under FCA oversight. Betfair's event-based offerings operate under a gambling authorisation, whilst emerging crypto-denominated platforms encounter regulatory uncertainty.
Asia-Pacific
- Japan — prediction markets remain effectively prohibited under gambling statutes (Penal Code Articles 185-187), with limited exceptions for state-run lottery schemes
- South Korea — likewise restricted under the National Sports Promotion Act and Criminal Act provisions
- Australia — subject to state-based gambling rules. Overseas platforms face restrictions under the Interactive Gambling Act 2001 (updated 2017)
- Singapore — the Remote Gambling Act 2014 prevents the majority of 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
Ahead of establishing any position on a prediction market, confirm three critical points: (1) Does your location's regulator authorise this platform? (2) What tax implications arise from your earnings? (3) What safeguards protect your funds if the operator encounters difficulties? For comprehensive guidance on taxation, consult our prediction market tax guide.
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