In this guide
Key takeaway: Regulatory frameworks for prediction markets differ substantially across regions. The United States has adopted CFTC oversight for licensed operators, the European Union classifies them as financial instruments under MiCA rules, whilst numerous jurisdictions across Asia enforce comprehensive prohibitions. Checking your jurisdiction's specific requirements before participating is crucial.
The prediction market regulation environment has undergone significant transformation over the last twenty-four months. Once positioned in regulatory limbo, the sector is now crystallising into a structured industry with distinct regional winners and restrictions. This overview surveys the international regulatory picture as it stands in mid-2026.
United States: The CFTC Era
Since 2023 enforcement initiatives, the Commodity Futures Trading Commission (CFTC) has emerged as the dominant US authority. Notable milestones include:
- Kalshi — holds full CFTC registration as a designated contract market (DCM), lawfully providing event contracts to American participants
- Polymarket — reached a settlement with the CFTC in 2022 following unauthorised operation. Following this resolution, American users cannot directly access the platform
- Legislative momentum — lawmakers tabled various proposals during 2025-2026 seeking to broaden the permissible scope of prediction markets beyond election-focused instruments
European Union: MiCA Framework
The Markets in Crypto-Assets (MiCA) regulation, operational throughout the EU since December 2024, establishes the governing structure. Prediction markets employing cryptocurrency tokens fall within crypto-asset services, necessitating:
- 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 various operators have submitted applications in France and Germany awaiting approval.
United Kingdom
The UK Financial Conduct Authority (FCA) evaluates prediction markets individually based on their characteristics. Platforms categorised as gambling activities operate under the UK Gambling Commission's remit; those structured as financial derivatives fall under FCA jurisdiction. Betfair's event-based markets function under a gambling authorisation, whereas emerging blockchain-based platforms navigate an ambiguous regulatory landscape.
Asia-Pacific
- Japan — prediction markets remain effectively prohibited under gambling statutes (Penal Code Sections 185-187), with limited 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 revised in 2017) blocks overseas operators from serving Australian participants
- Singapore — the Remote Gambling Act 2014 restricts the majority of internet-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 commencing any trading activity, confirm these essential points: (1) Does your location permit the platform you intend to use? (2) What income tax implications arise from your profits? (3) What safeguards protect your funds should the operator encounter difficulties? Our comprehensive prediction market tax guide covers these considerations in depth.
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