In this guide
Key takeaway: Regulatory treatment of prediction markets differs substantially across regions. The United States has adopted a CFTC-supervised model, the European Union classifies them as financial instruments under MiCA, whilst numerous countries in Asia enforce strict prohibitions. Checking your jurisdiction's specific requirements before participating is critical.
The prediction market regulation environment has undergone significant transformation over recent years. What previously occupied uncertain legal territory has now become an increasingly structured sector with distinct regional approaches. This overview examines the worldwide regulatory landscape as it stands in mid-2026.
United States: The CFTC Era
The Commodity Futures Trading Commission (CFTC) has functioned as the primary regulatory authority in America since its 2023 enforcement initiatives. Notable developments 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 unauthorised operation. Subsequently, American users cannot access the platform directly
- Legislative momentum — various proposals advanced during 2025-2026 aimed at broadening the scope of lawful prediction markets beyond election-related subjects
European Union: MiCA Framework
The Markets in Crypto-Assets (MiCA) directive, operational throughout the EU since December 2024, establishes the regulatory structure. Platforms offering prediction markets through cryptographic tokens must comply with crypto-asset service requirements, including:
- Obtaining Crypto-Asset Service Provider (CASP) authorisation
- Adherence to safeguards for users, anti-money laundering protocols, identity verification, and financial reserves
- Documentation requirements for tokens designated as asset-referenced instruments
To date, no prominent prediction market has secured full MiCA authorisation, though several entities have submitted applications in France and Germany.
United Kingdom
The UK Financial Conduct Authority (FCA) evaluates prediction markets individually based on their characteristics. Platforms categorised as gaming activities fall under the UK Gambling Commission's purview; those categorised as financial products fall under FCA oversight. Betfair's event offerings operate under gaming authority approval, whereas emerging blockchain-based platforms navigate an ambiguous regulatory position.
Asia-Pacific
- Japan — prediction markets face effective prohibition under gaming statutes (Penal Code Sections 185-187), with restricted exceptions for state-sanctioned lottery schemes
- South Korea — likewise prohibited under the National Sports Promotion Act and Criminal Act provisions
- Australia — subject to state-based gaming regulations. Foreign operators are barred by the Interactive Gambling Act 2001 (updated 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 establishing any position on a prediction market, confirm these essentials: (1) Does your location permit the platform's operation? (2) What fiscal implications apply to your returns? (3) What safeguards protect your capital if the service becomes insolvent? For comprehensive information on the regulatory snapshot, consult our resources.
PolyGram delivers straightforward entry to Polymarket liquidity alongside integrated performance tracking and streamlined cash-out procedures. Start trading on PolyGram →