The betting sector regulator in Brazil issued an official statement clarifying that prediction markets do not have formal authorization, while the regulatory debate progresses cautiously and in coordination with the National Securities Commission.
On March 9, 2025, the Secretariat of Prizes and Betting of the Ministry of Finance of Brazil (SPA/MF) issued an official statement that made clear the government’s position regarding one of the fastest-growing segments in the digital financial world: prediction markets. The announcement came on the same day that the investment firm XP announced a strategic alliance with Kalshi, one of the leading platforms in this type of operation, highlighting the tension between the progress of the private sector and the absence of a specific regulatory framework in the country.
What are prediction markets and why they generate debate in Brazil
Unlike traditional sports betting with fixed odds, prediction markets function as financial instruments in which users buy contracts linked to the outcome of future events. The contract price reflects the market’s perceived probability of that outcome, without a bookmaker acting as a direct counterparty.
This conceptual difference is key to understanding the regulatory debate in Brazil: by not fitting precisely into the definition of betting or traditional financial instruments, prediction platforms operate in a gray area that neither the SPA nor the National Securities Commission (CVM) has formally delimited so far.
Platforms such as Kalshi, based in the United States, and Polymarket, which operates on blockchain technology, have gained international prominence, especially during electoral cycles and high-impact global events.
The SPA’s official statement: no company is authorized
In its March 9 statement, the SPA was explicit: no Brazilian operator has formal authorization to offer prediction market services in the country. The agency reported that it is conducting continuous technical monitoring of the issue, with preliminary studies underway, and that any regulatory decision will depend on the conclusion of those internal analyses.
Furthermore, the Secretariat noted that it has received technical notes from private sector companies with evaluations of so-called predictive markets, and that it is approaching the matter with caution and institutional responsibility, prioritizing the prevention of regulatory gaps and consistency with the current legal framework.
Read more Minors and illegal online gambling: the growing concern in Jujuy
A central aspect of the statement is the reference to the necessary coordination with the CVM to analyze possible regulatory interfaces. This mention implies that the definitive classification of prediction markets in Brazil could involve both betting regulations and legislation on securities and capital markets, which complicates the process and delays timelines.
The alliance between XP and Kalshi: the private sector gets ahead of the regulator
On the same day the SPA issued its warning, XP, one of Brazil’s leading investment managers, announced a partnership with Kalshi to operate in the prediction markets segment. The move was interpreted by industry analysts as an anticipatory bet: positioning themselves in the market before regulation exists, with the expectation that regulations will arrive in the short or medium term.
This type of strategy is not new in the Latin American fintech ecosystem, where private sector actors often move into emerging segments and then push for favorable regulatory frameworks. However, the coexistence of this announcement with the SPA’s official statement creates a tension that the market will need to monitor closely in the coming months.
Regulatory perspectives: official prudence in the face of an expanding sector
The SPA statement reflects an institutional position of caution that, while not implying an express prohibition, does not enable the operation of new actors either. This calculated ambiguity is a frequent strategy for regulators seeking to gain time to develop solid rules without slowing down the sector’s development.
In parallel, the progress of private initiatives such as the XP-Kalshi alliance puts pressure on the regulator to accelerate the regulatory definition. International experience, particularly in the United States and the United Kingdom, where prediction markets have specific legal frameworks, could serve as a reference for Brazil when building its own regulatory scheme.
Coordination between the SPA and the CVM is, in this sense, indispensable: if prediction markets are classified as financial instruments, their supervision will fall primarily to the CVM; if the betting criterion prevails, the SPA will be the governing body. The definition of this regulatory boundary is, ultimately, the core of the debate that Brazil has pending.
Read more Philippines strengthens its tourism marketing in South Korea after losing nearly 20% of visitors
