Brazilian government moves to restrict prediction market platforms in Brazil

On April 24, 2026, Brazil’s Ministry of Finance announced a package of measures targeting prediction-market platforms operating in the country. Following a legal opinion issued by the Attorney General’s Office of the National Treasury (PGFN), the Brazilian Ministry of Finance’s Secretariat of Prizes and Betting (SPA) formally adopted its position that prediction markets operate according to the same logic as fixed-odds betting (a regulated form of gambling in Brazil in which bettors know the potential payout at the time they place a bet).

A technical note published on the same date states:

• The defining features of a prediction market consist of the potential existence of a future event, the bettor’s assumption of risk via a financial outlay, and the expectation of receiving a pre-determined payout if the future event occurs, calculated on the basis of an odds or multiplier factor.
• The fact that odds are formed dynamically through interactions among users, together with the ability to trade positions before the event is resolved, does not change the legal nature of the transaction.

On this basis, the Brazilian government has concluded that prediction markets and fixed-odds betting share the same core operating logic, including:

• Peer-to-peer trading (in the case of fixed-odds betting, this corresponds to a betting exchange);
• Pre-set payouts and fluctuating prices;
• Early cash-out options;
• The ability to wager on real-world sporting events (which the SPA says account for a significant and, in many cases, predominant share of the volume traded on prediction-market platforms); and
• The same target consumer base and functionally equivalent product offerings.

As for prediction markets based on political, social, cultural, weather-related or similar events, Brazil’s Ministry of Finance takes the view that the events underlying these contracts lack any genuine economic or financial basis. Therefore, because they do not serve a recognized financial market function, they resemble bets on the occurrence of future, uncertain events.

The SPA has also emphasized that wagering on electoral results is classified as an electoral offense under Brazilian electoral law, meaning that contracts linked to election outcomes fall even further outside the boundaries of legitimate financial market activity.

In light of these conclusions, the SPA has determined that the two models both overlap and complement each other. As such, prediction-market platforms that offer contracts on real-world sporting and other miscellaneous events are, in effect, unlawfully operating as fixed-odds betting providers (operating as such requires specific authorization in Brazil).  The SPA has therefore asserted its authority to order prediction market platforms to be blocked – a process already underway in coordination with the Brazilian Telecommunications Agency (Anatel), which can direct internet service providers to restrict access to non-compliant websites.

National Monetary Council resolution

In a related development on the same date, Brazil’s National Monetary Council (CMN) issued Resolution No. 5,298/2026, establishing general rules on the organization and operation of Brazil’s derivatives market.

The resolution is designed to prevent events unrelated to economic or financial variables from being used as underlying references in derivative contracts. Specifically, it bars derivative contracts linked to:

• Real-world sporting events – competitions, matches, or trials, whether individual or team-based, whose outcome is uncertain at the outset and that are organized either in accordance with the rules of Brazil’s national sports governing body or its affiliated organizations, or by governing bodies headquartered outside Brazil;
• Virtual events in online games – events or competitions whose outcome is determined by a random number, symbol, figure or object generator defined within the game’s rule system; and
• Real or virtual events of a political, electoral, social, cultural, or entertainment nature, or any other subject that does not constitute a genuine economic or financial reference as per Brazil’s Securities and Exchange Commission (CVM).

Under the resolution, the following may qualify as legitimate economic or financial references:

• Price or rate indices, securities indices, bond indices, interest rates, exchange rates, and credit-risk ratings or indices;
• Prices of commodities, financial assets, and securities traded on organized exchanges and over-the-counter markets, or recorded and held in financial market infrastructures authorized to operate by the Brazilian Central Bank or the CVM; and
• Other references tied to variables of material economic or financial interest, derived from prices or methodologies that are consistent and independently verifiable.

Importantly, the resolution makes it clear that these restrictions also apply to offering derivatives traded abroad in Brazil, in accordance with CVM regulations.  The derivatives market must observe the principles set out in the new resolution, including those relating to:

• Investor protections;
• Product, service, and transaction suitability;
• Transparency and clarity in disclosure; and
• The prevention of harmful regulatory arbitrage and speculation detrimental to investors and the public interest.

Outside Brazil, transactions and products offered on prediction markets may be classified as derivatives depending on their structure. However, the resolution prevents prediction market platforms from circumventing gambling restrictions by packaging their offerings as derivative contracts, and it blocks the distribution of foreign-traded derivatives in Brazil that lack a genuine economic or financial underlying reference.

Resolution No. 5,298/2026 is set to take effect on May 4, 2026.  The CVM will take any necessary steps and issue any necessary supplementary regulations to enforce the resolution’s provisions.

For more information on this topic, please contact Mattos Filho’s Banking & Finance and Entertainment practice areas.