Brazil bans prediction markets and blocks Kalshi, Polymarket derivatives

Brazil’s National Monetary Council (NMC) issued Resolution No. 5,298 to ban prediction markets that structure derivatives around non-economic events. Contracts tied to sports, political elections, and cultural outcomes are treated as “gambling disguised as finance.” Regulators ordered telecom watchdog Anatel to block the domains of 27 platforms in late April 2026, including Polymarket and Kalshi. The policy is framed as protecting household savings and limiting household debt linked to unregulated online gambling. The NMC allows derivatives only when linked to approved economic benchmarks (inflation, interest rates, exchange rates, commodity prices) and executed via Central Bank-authorized firms under tighter secondary rules. Polymarket was cited for unlicensed binary event contracts. Kalshi was also targeted under the new non-financial event restrictions, despite a March 2026 partnership with Brazil’s broker XP International. For crypto traders, this is a direct compliance signal for any prediction-market products using derivative-like structures. In the short term, Brazil’s access cuts can reduce onshore liquidity and risk appetite. Over time, user migration to offshore venues may raise operational and counterparty risk, while potentially slowing regulated growth. In contrast to Brazil’s approach, the U.S. CFTC is moving toward regulating some event contracts (treating certain ones as swaps) rather than banning them outright.