In this guide
Key takeaway: Regulatory frameworks for prediction markets differ significantly across regions. The United States has adopted a CFTC-regulated approach, 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 transformed substantially over the last twenty-four months. Once positioned in regulatory ambiguity, the sector is now crystallising into distinct regional regimes with clear geographical winners and losers. This overview outlines the current global regulatory picture as we move through mid-2026.
United States: The CFTC Era
Since its 2023 enforcement actions, the Commodity Futures Trading Commission (CFTC) has served as the principal regulatory authority across the US. Notable milestones 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 have been prevented from accessing the platform directly
- Legislative momentum — lawmakers have put forward several proposals during 2025-2026 aiming to broaden the permissible scope of prediction markets beyond election-related events
European Union: MiCA Framework
The Markets in Crypto-Assets (MiCA) regulation, which became operational in December 2024, establishes the EU's governing structure. Prediction markets employing cryptographic tokens fall within the crypto-asset services category, necessitating:
- Registration as an authorised Crypto-Asset Service Provider (CASP)
- Adherence to consumer safeguards, anti-money laundering protocols, identity verification, and reserve requirements
- Technical documentation for tokens designated as asset-referenced instruments
To date, no prominent prediction market has secured complete MiCA authorisation, though several entities maintain active applications in France and Germany.
United Kingdom
The UK's Financial Conduct Authority (FCA) evaluates prediction markets individually based on their characteristics. Platforms categorised as gambling operations come under the UK Gambling Commission's purview; those structured as financial derivatives fall within the FCA's remit. Betfair's event offerings function under a gambling licence, whereas emerging blockchain-based competitors navigate an ambiguous regulatory environment.
Asia-Pacific
- Japan — prediction markets face an effective prohibition under gambling statutes (Penal Code Articles 185-187), with restricted exemptions for state-sanctioned lottery schemes
- South Korea — likewise prohibited via the National Sports Promotion Act and Criminal Act provisions
- Australia — subject to state-based gambling controls. The Interactive Gambling Act 2001 (as revised in 2017) blocks foreign operators from serving Australian users
- 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 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
When considering participation in any prediction market, confirm these essential points: (1) Does your location permit the platform's operations? (2) What fiscal implications arise from your earnings? (3) What safeguards protect your funds if the operator encounters difficulties? For comprehensive tax information, consult our prediction market tax guide.
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