Brazil bans Polymarket and Kalshi: prediction markets under global regulatory fire
📋 En bref (TL;DR)
- Brazil banned 27 prediction market platforms including Polymarket and Kalshi via CMN Resolution 5.298
- The CFTC sued New York State to assert its exclusive jurisdiction over prediction markets
- 38 U.S. Attorneys General are backing Massachusetts against Kalshi, claiming 90% of bets are on sports
- A U.S. soldier was arrested for insider trading on Polymarket after betting on a classified military operation
- Polymarket is now blocked in over 33 countries, including France, Brazil, and most of Europe
- A major jurisdictional battle pits federal vs. state authority, potentially heading to the Supreme Court
The week of April 21, 2026, marked a turning point for prediction markets. In four days, Brazil banned 27 platforms, the U.S. CFTC sued New York State, 38 Attorneys General lined up against Kalshi, and a soldier was arrested for insider trading on Polymarket.
These simultaneous events reveal a sector in full identity crisis. The platforms present themselves as regulated financial instruments. States consider them illegal gambling sites.
Brazil bans 27 platforms in one sweep
On April 24, Brazil’s Finance Ministry executive secretary Dario Durigan announced the ban of 27 prediction market platforms. Among the names: Polymarket, Kalshi, PredictIt, Robinhood (forecasting feature), and Fanatics Markets.
The National Monetary Council’s Resolution 5.298 limits permissible derivative contracts to economic and financial benchmarks only. Contracts based on sports, political, cultural, or social events are now explicitly banned.
Durigan justified the measure on consumer protection grounds: “We have been monitoring the evolution of this sector in Brazil, which suffered a period of anarchy.” The measure aims to “protect income, prevent financial losses, and reduce families’ exposure to unsafe practices.” Telecom regulator Anatel blocked the domains within the day.
In the U.S., the CFTC fights back
On the same day, the CFTC (Commodity Futures Trading Commission) filed suit against New York State in the Southern District federal court. In the crosshairs: Governor Kathy Hochul, Attorney General Letitia James, and the state’s gaming commission.
The CFTC is seeking a declaratory judgment affirming its exclusive jurisdiction over event contracts. Chairman Mike Selig, four months into his tenure, has made this a flagship initiative: “CFTC-registered exchanges have faced an onslaught of state lawsuits seeking to limit Americans’ access to event contracts.”
New York is the fourth state the CFTC has sued, after Arizona, Connecticut, and Illinois. The trigger: on April 21, Letitia James sued Coinbase Financial Markets and Gemini Titan for allegedly operating illegal gambling platforms.
38 Attorneys General vs. Kalshi
Also on April 24, a bipartisan coalition of 38 Attorneys General (37 states plus DC) filed an amicus brief supporting Massachusetts in its lawsuit against Kalshi.
The key figure from this brief: in 2025, Kalshi users bet over $1 billion per month, with 90% on sports events. The AGs argue that the 2010 Dodd-Frank Act, which Kalshi invokes to justify its financial status, was designed for instruments related to the 2008 financial crisis — not online sports betting.
Letitia James summarized their position: “Prediction markets cannot ignore states’ gambling laws that are designed to protect consumers.”
Wisconsin escalated the same day with three separate complaints against Polymarket, Kalshi (and its distributors Robinhood and Coinbase), and Crypto.com. The prosecutor cited Kalshi’s own Instagram ad: “The First Nationwide Legal Sports Betting Platform.”
The Van Dyke case: military insider trading
On April 23, Master Sergeant Gannon Ken Van Dyke, a U.S. Special Forces member, was arrested and charged on five counts. This soldier was involved in planning “Operation Absolute Resolve,” the operation to capture Venezuelan President Nicolas Maduro.
Between late December 2025 and January 2, 2026, Van Dyke placed 13 bets on Polymarket related to Maduro’s removal, U.S. forces entering Venezuela, and Trump invoking war powers. Initial stake: $33,934. Alleged profit: $409,881.
This case highlights prediction markets’ vulnerability to insider trading. Other suspicious cases have been identified: one trader earned nearly $1 million since 2024 by betting on U.S. and Israeli military strikes against Iran with suspicious timing.
Heading toward a Supreme Court showdown?
The legal landscape is fractured. On one side, the CFTC claims exclusive federal jurisdiction. On the other, 38 Attorneys General defend states’ right to regulate what they consider gambling.
Courts are split. On April 7, the Third Circuit appeals court ruled that New Jersey cannot regulate Kalshi, siding with the CFTC. But at least eleven states have active proceedings against prediction platforms.
The direction seems clear: an escalation to the Supreme Court, which will need to rule on the legal nature of these contracts. Are they regulated financial instruments under CFTC jurisdiction, or disguised bets subject to state gambling laws?
Internationally, Polymarket is now blocked in over 33 jurisdictions, including France, Belgium, Australia, the UK, Italy, Portugal, and now Brazil. A platform valued at $9.6 billion whose reach shrinks as its popularity grows.
📚 Glossary
- Prediction market: A platform where users buy and sell contracts whose value depends on the outcome of a future event (election, match, policy decision).
- Polymarket: The world’s largest prediction market platform, running on the Polygon blockchain. Valued at $9.6 billion in 2026.
- Kalshi: A prediction market platform registered with the CFTC in the United States. Its users bet over $1 billion per month in 2025.
- CFTC: Commodity Futures Trading Commission, the U.S. regulator for derivatives and futures markets. It claims exclusive jurisdiction over prediction markets.
- Event contract: A financial instrument whose settlement depends on the occurrence of a specific event. At the heart of the debate: is it a financial product or a bet?
- Insider trading: Using confidential, non-public information to make financial transactions. Criminally punishable in most jurisdictions.
Frequently Asked Questions
Why did Brazil ban prediction markets?
Brazil considers these platforms as gambling sites, not financial instruments. CMN Resolution 5.298 aims to protect consumers from “new forms of harmful indebtedness.”
Is Polymarket accessible in France?
No. Polymarket is blocked in France and over 33 countries. The platform is considered an unlicensed gambling site by European regulators.
What is the CFTC's complaint against New York?
The CFTC argues that New York’s gambling laws encroach on its exclusive federal jurisdiction. It asks the court to prevent New York from enforcing its laws against CFTC-registered platforms.
What is the Van Dyke Polymarket case?
A Special Forces Master Sergeant used classified military information to bet on Polymarket. He invested $33,934 and allegedly earned $409,881 by betting on events tied to a secret Venezuela operation.
Are prediction markets legal?
The question remains unsettled. In the U.S., the CFTC considers them legal financial instruments. But 38 Attorneys General classify them as illegal gambling. The case may ultimately reach the Supreme Court.
📰 Sources
This article is based on the following sources:
- CFTC – Press Release 9218-26: CFTC sues New York (April 24, 2026)
- Crypto Briefing – Brazil Blocks Kalshi and Polymarket
- NY AG – 38 Attorneys General Defend States’ Gambling Laws
- DOJ – U.S. Soldier Charged for Prediction Market Insider Trading
- The Block – CFTC Sues New York Over Prediction Market Crackdown
How to cite this article: Fibo Crypto. (2026). Brazil bans Polymarket and Kalshi: prediction markets under global regulatory fire. Retrieved April 26, 2026, from https://fibo-crypto.fr/en/brazil-bans-polymarket-kalshi-cftc-prediction-markets
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