World Cup fuels global crackdown on prediction markets

Polymarket’s World Cup Winner market has hit $2 billion in lifetime volume, but Brazil blocked 27 prediction platforms in April and Japan’s Bitbank began suspending linked accounts on June 15.yahoo
The CFTC signaled on June 10 that sports event contracts may be “contrary to the public interest,” while a bipartisan Senate bill seeks to ban such contracts outright.federalregister
No country has created a dedicated prediction market regulatory framework, and 19 U.S. federal lawsuits are attempting to resolve whether the platforms are derivatives or gambling.tsimagine

World Cup Exposes Global Regulatory Rift Over Prediction Markets

The 2026 FIFA World Cup, the first major international tournament since prediction markets surged into the mainstream, has laid bare a widening global divide over whether platforms like Kalshi and Polymarket should be allowed to offer sports-related contracts. While American users trade hundreds of millions of dollars on match outcomes, governments in Brazil and Japan have moved to shut down or restrict access, and a coalition of gaming interests is pressuring U.S. lawmakers to close the door on sports contracts altogether.

Billions in Play, Borders Drawing Lines

Polymarket’s World Cup Winner market alone has generated $2 billion in lifetime volume, with $137 million traded in a single day last week, according to Yahoo Finance. Global bets on the tournament could exceed $50 billion, according to Macquarie analyst estimates reported by CNBC.cnbc

But much of the world is pulling in the opposite direction. In April, Brazil’s Finance Ministry ordered the deactivation of 27 prediction market platforms, including both Polymarket and Kalshi, classifying them as unregulated gambling. Finance Minister Dario Durigan said the platforms violate betting laws sanctioned by Congress, and Brazil’s National Monetary Council issued new rules prohibiting derivative contracts linked to sports events, elections, and social outcomes.reuters

In Japan, cryptocurrency exchange Bitbank announced on June 15 that it would suspend accounts making deposits or withdrawals connected to prediction market services, citing potential violations of Japan’s Penal Code Article 185, which classifies crypto event-contract trading as gambling. Polymarket already geoblocks Japanese IP addresses and lists Japan among 35 restricted jurisdictions.bitcoin

U.S. Faces Its Own Reckoning

Even in the United States, where prediction markets currently operate under Commodity Futures Trading Commission oversight, the regulatory terrain is shifting. Senators Adam Schiff and John Curtis introduced the Prediction Markets Are Gambling Act in March, which would bar CFTC-registered entities from listing sports-related or casino-style event contracts. On June 10, the CFTC itself issued a notice suggesting sports event contracts may be found “contrary to the public interest”.tribalbusinessnews

The gaming industry has mobilized around the issue. UNITE HERE President Gwen Mills said in a June 4 statement that “prediction markets are putting good, union jobs in the gaming industry at risk,” calling on Congress to include a ban on sports contracts in pending cryptocurrency market structure legislation. The American Gaming Association has argued that sports event contracts should not be used to bypass state and tribal gaming laws. Representative Gabe Vasquez introduced an amendment in March that would prohibit the listing of sports and casino-style event contracts on federally regulated commodity exchanges.house

An Unresolved Tension

No country has yet created a bespoke regulatory framework for prediction markets. The fundamental question — whether these platforms are financial derivatives or gambling — remains unresolved across jurisdictions. In the U.S., 19 federal lawsuits are attempting to force clarity, while the CLARITY Act, a crypto market structure bill that could include prediction market restrictions, has roughly even odds of becoming law this year according to Polymarket’s own traders.tsimagine