Brazil's Finance Ministry blocked access to prediction market platforms on Thursday, targeting major platforms including Polymarket and Kalshi. The move follows a government crackdown on platforms used by traders to bet on various event outcomes.
Finance Minister Dario Durigan stated the platforms violated betting regulations approved by the Brazilian Congress and lacked proper regulatory oversight. He noted that prediction markets are currently illegal and unregulated within the country.
According to Decrypt, Durigan added that blocking these platforms would protect citizens' savings as the government works to reduce national debt levels.
“We have advocated for $“a stricter enforcement and very rigorous regulation, which will continue to advance, so that we can curb the negative externalities and social harm that unregulated gambling causes to the Brazilian population,” Durigan said.
Regulatory restrictions
Banco Central do Brasil issued a resolution prohibiting derivatives contracts based on non-economic benchmarks. This includes contracts tied to sports events, virtual gaming, and political outcomes.
The central bank cited risks to market integrity and investor protections as the primary drivers for the resolution.
Chief of Staff Miriam Belchior said the measure is intended to "protect income, prevent financial losses, and reduce families' exposure to unsafe practices."
Reuters reported that both Polymarket and Kalshi were inaccessible in Brazil as of Friday afternoon.
While Decrypt focused on the primary ban, a researcher for The Block reported that Finance Minister Dario Durigan indicated approximately 28 betting platforms were banned in the country due to rising concerns regarding online gambling.
Global regulatory pressure
The Brazilian crackdown follows a pattern of increasing restrictions on prediction markets globally. Portugal restricted access to Polymarket in January, and several U.S. states have implemented similar measures.
In the United States, Wisconsin filed lawsuits on Friday against several entities, including Kalshi, Robinhood, Coinbase, Polymarket, and Crypto.com. The lawsuits allege that contracts involving sports events violate the state's commercial gambling ban.
