In this guide
Key takeaway: Regulatory frameworks governing prediction markets differ substantially across regions. The United States has adopted a CFTC-supervised model, the European Union classifies them as financial instruments under MiCA, whilst numerous Asian jurisdictions enforce comprehensive prohibitions. Checking your jurisdiction's specific requirements before participating is crucial.
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 regional winners and losers. This overview surveys the worldwide regulatory landscape at present in mid-2026.
United States: The CFTC Era
Since its 2023 enforcement campaign, the Commodity Futures Trading Commission (CFTC) has served as the principal regulatory authority across America. Notable developments include:
- Kalshi — holds full CFTC registration as a designated contract market (DCM), legitimately providing event contracts to American participants
- Polymarket — reached a settlement with the CFTC in 2022 following unlicensed operations. Subsequently, American users cannot directly access the platform
- Legislative momentum — numerous proposals advanced during 2025-2026 seeking to broaden permissible prediction market activities beyond election-focused categories
European Union: MiCA Framework
Since its full implementation in December 2024, the Markets in Crypto-Assets (MiCA) regulation establishes the EU's governing structure. Prediction markets employing cryptocurrency tokens fall under crypto-asset services classification, mandating:
- Registration as a Crypto-Asset Service Provider (CASP)
- Adherence to investor safeguards, anti-money laundering protocols, identity verification, and reserve requirements
- Technical documentation for tokens designated as asset-referenced instruments
To date, no leading prediction market has secured complete MiCA authorisation, though several maintain pending applications across French and German regulators.
United Kingdom
The UK's Financial Conduct Authority (FCA) evaluates prediction markets individually based on their characteristics. Platforms categorised as gaming operations answer to the UK Gambling Commission; those classified as financial derivatives answer to the FCA. Betfair's event offerings function under gaming authorisation, whereas emerging blockchain-based competitors encounter regulatory uncertainty.
Asia-Pacific
- Japan — prediction markets remain prohibited under gambling statutes (Penal Code Sections 185-187), except for state-sanctioned lottery schemes
- South Korea — likewise forbidden pursuant to the National Sports Promotion Act and Criminal Code provisions
- Australia — subject to jurisdiction-specific gaming rules. The Interactive Gambling Act 2001 (revised 2017) prevents foreign operators from serving Australian customers
- Singapore — the Remote Gambling Act 2014 restricts 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 licence | 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 establishing any position through a prediction market platform, confirm three essential points: (1) Does your jurisdiction permit the platform's operations? (2) Which tax rules govern your profits? (3) What safeguards protect your funds if the operator becomes insolvent? Consult our prediction market tax guide for comprehensive tax information.
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