Prediction Markets in Brazil: what changes with the New Rules Issued by the National Monetary Council and the Secretariat for Prizes and Betting

On April 24, the National Monetary Council (“CMN”) took a decisive step in the regulation of so-called prediction markets. Through CMN Resolution No. 5,298/2026 (“CMN Resolution No. 5,298”), which will enter into force on May 4, 2026, the offering and trading, in Brazil, of derivative agreements whose underlying assets are linked to certain types of events, such as sports, political and electoral events, or whose underlying assets are not representative of recognized economic-financial benchmarks, are now expressly prohibited. The measure directly impacts the operation of prediction market platforms and has relevant implications for the sector.

In the context of prediction markets, platforms such as Polymarket and Kalshi allow users to trade agreements linked to the outcome of future events, such as elections, sports competitions and economic indicators, among others. The price of these agreements reflects the collective expectations of participants as to the likelihood of each outcome, creating a dynamic that lies at the boundary between a financial instrument and betting. In Brazil, the regulatory treatment of these platforms had been under discussion, and CMN Resolution No. 5,298, together with Technical Note SEI No. 2958/2026/MF issued by the Secretariat for Prizes and Betting of the Ministry of Finance (“SPA” and “Technical Note”, respectively), outlines the regulatory treatment applicable to these markets from two perspectives: derivatives, on the one hand, and fixed-odds betting, on the other.

Specifically, Article 3 of CMN Resolution No. 5,298 prohibits the offering and trading, in Brazil, of derivative agreements whose underlying assets are related to:

1. a real sports-themed event, as defined in Law No. 14,790, of December 29, 2023 (“Law No. 14,790/2023”);
   
2. a virtual event of an online game, as defined in Law No. 14,790/2023; and
   
3. a real or virtual event of a political, electoral, social, cultural, entertainment or any other nature that, at the discretion of the Brazilian Securities and Exchange Commission (“CVM”), is not representative of an economic-financial benchmark.

The prohibitions listed above also apply to offers made in Brazilian territory of derivatives traded abroad.

In addition, CMN Resolution No. 5,298 defines as economic-financial benchmarks – and, therefore, as admissible underlying assets  – price or rate indexes, securities indexes, bond indexes, interest rates, exchange rates, credit risk ratings or indexes, commodity prices, prices of financial assets and securities traded on organized exchange or over-the-counter markets, or registered and deposited with financial market infrastructures authorized by the Central Bank of Brazil or by the CVM, as well as other benchmarks related to relevant economic or financial variables, calculated on the basis of consistent and verifiable methodologies. In this context, the new “Event Agreements” platform of B3 S.A. – Brasil, Bolsa, Balcão (“B3”) could, in theory, fall outside the prohibitions set forth in Article 3, provided that the agreements are backed by economic-financial benchmarks and comply with the applicable regulations, which will remain subject to the CVM’s assessment.

In line with CMN Resolution No. 5,298 and pursuant to the Technical Note, the SPA concluded that prediction market platforms, although presented as financial instruments or atypical agreements focused on sports, political, electoral, social or cultural themes, in practice reproduce the essential elements of the lottery modality known as fixed-odds betting, under Law No. 14,790/2023. Accordingly, in the SPA’s view, these platforms do not constitute contractual or financial innovation, but rather reproduce a modality that is already regulated and subject to the applicable rules. In this regard, the SPA recommended that prediction markets offering agreements linked to real events – whether sports-themed or relating to other non-economic-financial themes – be deemed to be unlawfully operating the fixed-odds betting lottery modality, suggesting restrictions on access to such platforms, including by blocking access for users located in Brazil, pursuant to Article 17 of Law No. 14,790/2023, as set forth in the Technical Note.

Additionally, the Technical Note highlights that, with respect to electoral events, there is a prohibition under electoral rules, pursuant to TSE Resolution No. 23,735/2024, as amended by TSE Resolution No. 23,744/2024, which increases the legal risk associated with this type of market. According to the Technical Note, the use of platforms, including digital platforms, to offer bets, prizes or benefits linked to candidacies or election results may constitute an electoral offense and may amount to abuse of economic power and illegal vote solicitation.

CMN Resolution No. 5,298 provides that the CVM will adopt, within the scope of its legal authority, the measures necessary for the supplementary regulation and enforcement of the provisions set forth therein, and will also play a relevant role in assessing whether a given event or indicator qualifies as an economic-financial benchmark suitable to serve as the underlying asset of derivatives. Monitoring the regulator’s next steps will be essential to understanding the definitive scope of these new rules.

In line with the measures, the Federal Government announced that at least 27 prediction market platforms operating in Brazil, including Polymarket and Kalshi, had been blocked on the grounds that they were deemed illegal under the regulations in force and the fixed-odds betting legislation.

We note that this material is provided for informational purposes only. Our team closely monitors trends and developments in the Gaming and Betting and Derivatives sectors and remains available to provide additional information on these and other matters.