In this guide
Key takeaway: Regulatory treatment of prediction markets differs substantially across regions. The United States has adopted a CFTC-regulated framework, the European Union classifies them as financial instruments under MiCA, whilst numerous countries throughout Asia enforce comprehensive prohibitions. Checking your jurisdiction's specific requirements before participating is crucial.
The prediction market regulation environment has transformed considerably over recent years. Once occupying murky legal territory, the sector now features increasingly defined rules with distinct regional approaches. This overview charts the worldwide regulatory landscape as it stands in mid-2026.
United States: The CFTC Era
Since its enforcement campaign in 2023, the Commodity Futures Trading Commission (CFTC) has served as America's principal regulatory authority. 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 unauthorised operations. American customers have subsequently been prevented from accessing the platform directly
- Legislative momentum — numerous proposals advanced during 2025-2026 seek to broaden the permissible scope of prediction markets beyond election-related events
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 crypto tokens fall under crypto-asset services classification, necessitating:
- Registration as an authorised 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 several entities maintain active applications in France and Germany.
United Kingdom
The UK 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 FCA oversight. Betfair's event offerings operate pursuant to a gambling licence, whereas emerging blockchain-based platforms encounter regulatory uncertainty.
Asia-Pacific
- Japan — prediction markets remain prohibited under gambling statutes (Penal Code Articles 185-187), with limited carve-outs for state-sanctioned lotteries only
- South Korea — likewise forbidden through the National Sports Promotion Act and Criminal Act provisions
- Australia — subject to state-based gambling rules. The Interactive Gambling Act 2001 (as amended in 2017) blocks foreign operators from serving Australian users
- Singapore — the Remote Gambling Act 2014 restricts most online 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
Prior to commencing trading on any prediction market, confirm the following: (1) Does your region permit the platform's operations? (2) What fiscal implications arise from your earnings? (3) What safeguards protect your funds should the operator encounter difficulties? Consult our prediction market tax guide for comprehensive tax information.
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