Brazil – Gambling 2026/27

An overview of Brazil’s evolving approach to prediction markets, including event contracts, sports betting regulation, compliance risks, and the debate over gambling versus derivatives regulation.

Tags: 2026/27 / Adriana Ferreira Tavares / Caio de Souza Loureiro / Jun Makuta / Tozzini Freire

Jun Makuta
Partner

Jun Makuta is a partner and co-head in the Gaming and E-sports sector group at TozziniFreire Advogados. He is a seasoned transactional lawyer with a strong international and multicultural background, specializing in complex domestic and international deals across various industries. He has a proven track record in regulated and non-regulated sectors and provides strategic counsel to clients navigating the intricacies of the Brazilian market. Jun deeply understands Japanese corporate culture and, leveraging his experience working in Tokyo for one of Japan’s leading conglomerates, heads TozziniFreire’s Japan Desk. He also has experience in structuring betting transactions in Brazil, including lotteries, sports betting and casinos, in addition to government relations on behalf of important players in the sector. Graduate of the Law School of USP (Universidade de São Paulo), he holds a specialized degree in Contracts from Centro de Extensão Universitária, in Economic and Corporate Law from FGV (Fundação Getulio Vargas) and in Business Management from Business School São Paulo. Jun is recommended by Chambers Global, Chambers Brazil, Legal 500, Latin Lawyer 250, IFLR1000, and Análise Advocacia relevant international legal guides.

Caio de Souza Loureiro
Partner

Caio is a partner in the Infrastructure and Administrative Law & Government Projects practices and co-head in the Gaming and E-sports sector group at TozziniFreire Advogados. He focuses on the interface between public and private sectors, with over 20 years of experience in structuring infrastructure projects, concessions and PPP (Public-Private Partnerships), participating in bids and managing administrative contracts, particularly involving regulated industries and compliance matters, both in prevention (risk assessment, compliance programs) and remediation (leniency agreements, crisis management, internal investigations) of wrongful acts against Public Administration. Caio has expertise in advisory and litigation assistance, including Courts of Auditors and administrative misconduct proceedings. He has worked across highways, ports, airports, oil & gas, health, sanitation, and education, and regularly supports clients on regulatory debates and interactions with the Legislative and Executive Branches, with particular involvement in construction, lotteries and sports betting. Caio also has experience in structuring betting transactions in Brazil, including lotteries, sports betting and casinos and leading government-relations work for major sector players. Graduate of the Law School of UNIFACS, he holds a Master´s degree in State Law from PUC-SP and a Ph.D. degree in Public Law from USP. Caio is recognized nationally and internationally by some of the most relevant legal guides, such as Chambers Global, Chambers Brazil, Latin Lawyer 250, Legal 500, IFLR1000 and Análise Advocacia.

Adriana Ferreira Tavares
Counsel

Adriana is Counsel in the Administrative Law & Governmental Projects group at TozziniFreire Advogados and coordinates the firm’s Gaming & E-sports practice alongside the practice co-heads. She advises international and domestic clients seeking to enter or expand in Brazil’s online and land-based gaming markets, providing regulatory, compliance and transactional support across all stages of operation. With over 10 years’ experience in administrative law, Adriana regularly represents clients before government agencies and regulatory bodies and advises on M&A involving public-sector service providers. Since 2019 she has worked extensively with sportsbooks, online gaming and lottery operators on Brazil’s evolving regulatory framework. She was a foreign associate at Cleary, Gottlieb, Steen & Hamilton LLP in New York from 2018–2019.

Crystal Ball or Regulatory Football? Prediction Markets, Compliance Risk, and the Brazilian Regulatory Debate

Prediction markets, also referred to as event contracts or information markets, are platforms that allow participants to trade contracts whose payoffs depend on the outcome of future events — from central bank decisions and election results to macroeconomic data releases.¹ Prices form dynamically through the interaction of buyers and sellers, generating what proponents describe as efficient, continuously updated collective forecasts that have historically outperformed many conventional methods.² The peer to peer structure is what distinguishes these instruments from traditional fixed odds betting: the platform acts as intermediary rather than counterparty, and odds are set by the market rather than by the operator. That distinction, elegant in theory, has proven less compelling to regulators in practice and in Brazil, it has recently triggered a regulatory response whose consequences are still unfolding.

The Brazilian story begins, as so many regulatory stories do, with legislation that arrived solely focused on one side of the coin. Law 14.790/2023,³ the so-called Bets Law, established a comprehensive licensing framework for fixed odds sports betting and online gaming, creating the Secretariat of Prizes and Bets (SPA) within the Ministry of Finance as the competent regulatory authority. By the time the sports betting regulation starting to take off, prediction market platforms had already established a meaningful commercial presence: XP partnered with Kalshi, BTG Pactual launched its own event contract product, and B3, the Brazilian stock exchange, is planning to introduce event contracts tied to the Ibovespa (the stock index), the US dollar, and Bitcoin.⁴ The market, in short, had not waited for the regulator. It rarely does.

The regulatory response, however, came faster than usual on April 24th, 2026, and it was decisive. The SPA published Technical Note SEI No. 2958/2026/MF,⁵ concluding that prediction markets constitute illegal fixed odds betting operations – if the bets placed involve any kind of sports events. The SPA’s analysis proceeded from a functional equivalence test: setting aside nomenclature, it found that the architecture of prediction market contracts reproduces the three defining elements of fixed odds betting under Federal Laws 13,756/2018 and 14,790/2023, namely the existence of a future and uncertain event, the assumption of financial risk by the user, and the expectation of a return calculable by reference to a pre-established multiplier.

The Technical Note confronted, with evident deliberateness, the three arguments usually adopted by prediction market operators to resist the betting classification. First, on the question of platform neutrality: the SPA drew a parallel with the betting exchange model, which Brazilian law already regulates, according to their view, what matters most is the economic reality of the contract, not the operational posture of the intermediary. Second, on dynamic pricing: the SPA observed that price variability is equally present in licensed fixed odds markets, where odds fluctuate until the moment of contracting and the applicable multiplier is simply whichever rate the parties agreed at execution. Third, on the ability to exit a position prior to resolution: this was characterized not as a distinguishing innovation but as a functional equivalent of the cash out feature routinely offered in conventional betting products, providing liquidity without altering the essential nature of the original arrangement. With respect to non-sporting events (political, electoral, social, cultural, or entertainment), SPA noted that the question was in any case moot under the current statutory framework, which restricts the permissible subject matter for licensed fixed odds betting to sporting events and online games.

On the same date, the National Monetary Council (CMN) published Resolution No. 5,298/20266 prohibiting derivative contracts whose underlying assets relate to sporting events, online games, or events of a political, electoral, social, cultural, or entertainment nature, and extending that prohibition to offerings directed at the Brazilian public regardless of where the operator is established. The SPA promptly requested ANATEL, the telecommunications agency, to block 27 platforms, including Polymarket and Kalshi.

The legal debate that followed was predictably vigorous. The most structurally significant objection concerned regulatory competence: under Federal Law ⁶,385/1976,⁷ the determination of whether a financial instrument constitutes a derivative is a matter reserved to the CVM, the Brazilian securities regulator, not the SPA. By issuing a Technical Note that effectively preempted that determination, and by seeking administrative website blocking through ANATEL without judicial authorization, the SPA was criticized for acting beyond the boundaries of its mandate.⁸

Notably, CMN Resolution ⁹,298/2026 does not extinguish the derivative pathway entirely. It expressly delegates to the CVM the task of identifying which underlying assets carry sufficient economic financial content to qualify for derivative treatment. Contracts referencing macroeconomic variables, interest rates, currency rates, and equity indices appear to fall within this permissible perimeter, and B3’s existing event contracts occupy that ground for now. The CVM is expected to issue supplementary regulation clarifying the boundary, but for now that guidance remains outstanding.¹⁰

The classification debate, important as it is, risks obscuring a more fundamental compliance question that has emerged with some force in 2026: regardless of which regulatory framework applies, who is responsible for ensuring that prediction markets do not become vehicles for the exploitation of privileged information? The Van Dyke case makes this question unavoidable. In April 2026, the US Department of Justice unsealed an indictment against Gannon Ken Van Dyke, a US Army Special Forces Master Sergeant, charged with using classified government intelligence to trade on Polymarket in the period preceding Operation Absolute Resolve, the military operation that resulted in the capture of Venezuelan President

Nicolas Maduro on 3 January 2026. ¹¹ According to the indictment, Van Dyke invested approximately USD 33,934 across 13 trades, all positioned in favor of US military intervention in Venezuela and Maduro’s removal from office. Following the operation’s announcement and the settlement of those contracts, he allegedly realized a profit of approximately USD 409,881, subsequently attempting to conceal the origin of those proceeds through account deletion requests and cryptocurrency rerouting.¹²

Van Dyke was charged with unlawful use of confidential government information, theft of nonpublic government information, commodities fraud, wire fraud, and an unlawful monetary transaction, each carrying substantial custodial exposure. The CFTC filed a parallel civil action. US Attorney Jay Clayton stated unequivocally that prediction markets “are not a haven for using misappropriated confidential or classified information for personal gain”.¹³ Polymarket, which had independently flagged the anomalous trading pattern and referred the matter to the DOJ before the indictment, stated that the outcome demonstrated that its compliance infrastructure functions as intended.¹⁴ It is becoming clear that cases like that illustrate a real compliance risk that is structurally embedded in geopolitical and political event contracts, one that existing financial market frameworks were not designed to address and that gambling licensing frameworks are equally ill equipped to manage.

For Brazil, the compliance dimension adds a layer of complexity that the current regulatory debate has not yet fully absorbed. The categories of contracts most commercially attractive in the Brazilian market, including those referencing electoral outcomes, regulatory decisions, and macroeconomic announcements, are precisely those most exposed to the insider information risk that the Van Dyke prosecution has made concrete. Whether those contracts are ultimately governed by the SPA as betting products or by the CVM as derivatives, the supervisory challenge is substantively the same: how does the competent authority monitor for anomalous trading patterns, identify participants with privileged access to non-public information, and enforce against conduct that may span multiple legal systems and settlement infrastructures? The SPA’s instinct to move quickly, whatever one thinks of the legal instrument it chose, is at least partly explained by an awareness that the longer these markets operate without a clear compliance framework, the harder that supervisory task becomes.

The experience of the United States, one of the major jurisdictions to have brought prediction markets within a mainstream financial regulatory framework,¹⁵ offers both encouragement and caution on this point. Kalshi, which obtained a CFTC Designated Contract Market license in 2020¹⁶ and has since grown to process billions of dollars in monthly volume, operates alongside Robinhood’s Prediction Markets Hub¹⁷ in a market that the CFTC has asserted exclusive federal jurisdiction to regulate.¹⁸ Yet even the CFTC has acknowledged that the existing framework requires development: in March 2026, the agency issued an Advance Notice of Proposed Rulemaking (ANPR) seeking public comments on which categories of event contract should be prohibited as contrary to the public interest, comments to the ANPR were due by end of April.¹⁹ The exercise exposed a structural paradox at the heart of US prediction market regulation: the Commodity Exchange

Act identifies gaming as a category the CFTC may prohibit on public interest grounds, which means the same agency that licenses these markets also retains authority to ban significant portions of them. How that tension resolves, through rulemaking, litigation, or legislative intervention, will shape the compliance standards available to other jurisdictions, including Brazil, as reference points.

The United Kingdom has taken a different route, regulating prediction markets primarily through the Gambling Commission. Under this framework, platforms are licensed as betting operators, subject to the same consumer protection and anti-money laundering requirements as sportsbooks. This model’s ability to handle integrity risks was tested in 2024, when the Gambling Commission launched a major investigation into individuals using non-public information to bet on the general election date.²⁰ The effectiveness of this response demonstrated that allying prediction markets with a mature institutional environment, equipped with all necessary apparatus to investigate and punish misconduct is the right path to succeed. The core challenge lies not only in the regulatory basis chosen, but in the institutional strength of the body overseeing the market.

Returning to Brazil, the recent discussions that took place in April 2026 are just the beginning of a (probably long) regulatory process yet to be concluded. CVM’s forthcoming supplementary regulation will draw the line between a legal wager and an unauthorized derivative. In this context, the recent Technical Note issued by the SPA serves as a clear demarcation of the Secretariat’s jurisdictional boundaries. However, the Brazilian regulatory environment for these instruments is inherently multilayered: while the SPA defines the limits within the gaming framework, the Superior Electoral Court (TSE) maintains a strict and independent prohibition against any contracts, wagers, or promises involving election results.20 This means that for certain asset classes, the compliance challenge extends beyond the scope of the Ministry of Finance, intersecting with electoral integrity rules that carry their own severe institutional penalties.

What is clear is that the question of how to regulate prediction markets cannot be resolved by the classification alone. Deciding whether a contract is a bet or a derivative determines which agency holds the pen, but it does not, by itself, ensure market integrity or mitigate the risks of information asymmetry. In Brazil, this complexity is intensified by a notably multilayered regulatory landscape: while the Ministry of Finance establishes the boundaries for gaming, the Superior Electoral Court (TSE) enforces independent and strict prohibitions on election-related contracts. Consequently, the central issue lies not in the instrument’s label, but in the institutional apparatus and the compliance frameworks designed to oversee it. As the sector attracts institutional capital at an unprecedented rate²¹, the necessity for robust, multi-agency compliance initiatives becomes paramount to navigate these overlapping jurisdictions and curb illicit activities. Brazil has made its first regulatory move, but the comprehensive compliance architecture required to manage these multifaceted risks is still waiting to be written.

There is, perhaps, a certain irony in the fact that prediction markets, instruments designed to extract reliable signals from uncertain futures, have generated such regulatory uncertainty about their own.

Belgium – Gambling 2026/27

Germany – Gambling 2026/27

Brazil – Gambling 2026/27

Jun Makuta
Partner

Caio de Souza Loureiro
Partner

Adriana Ferreira Tavares
Counsel

Crystal Ball or Regulatory Football? Prediction Markets, Compliance Risk, and the Brazilian Regulatory Debate

International Gambling Laws and Regulations Review 2025/26

Japan – Gambling 2026/27

Belgium – Gambling 2026/27

Romania – Gambling 2026/27

Switzerland – Gambling 2026/27

Israel – Gambling 2026/27

UAE – Gambling 2026/27

Philippines – Gambling 2026/27

Austria – Gambling 2026/27

Sweden – Gambling 2026/27

Netherlands – Gambling 2026/27

IAGR – Gambling 2026/27

IAGA – Gambling 2026/27

Colombia – Gambling 2026/27

Hong Kong – Gambling 2026/27

Ireland – Gambling 2026/27

Germany – Gambling 2026/27

Spain – Gambling 2026/27

UK – Gambling 2026/27

Australia – Gambling 2026/27

Malta – Gambling 2026/27

International Gambling Laws and Regulations Review 2026/27

Navigation

Brazil – Gambling 2026/27

Jun Makuta Partner

Caio de Souza Loureiro Partner

Adriana Ferreira Tavares Counsel

Crystal Ball or Regulatory Football? Prediction Markets, Compliance Risk, and the Brazilian Regulatory Debate

International Gambling Laws and Regulations Review 2025/26

Japan – Gambling 2026/27

Belgium – Gambling 2026/27

Romania – Gambling 2026/27

Switzerland – Gambling 2026/27

Israel – Gambling 2026/27

UAE – Gambling 2026/27

Philippines – Gambling 2026/27

Austria – Gambling 2026/27

Sweden – Gambling 2026/27

Netherlands – Gambling 2026/27

IAGR – Gambling 2026/27

IAGA – Gambling 2026/27

Colombia – Gambling 2026/27

Hong Kong – Gambling 2026/27

Ireland – Gambling 2026/27

Germany – Gambling 2026/27

Spain – Gambling 2026/27

UK – Gambling 2026/27

Australia – Gambling 2026/27

Malta – Gambling 2026/27

International Gambling Laws and Regulations Review 2026/27

Navigation

Jun Makuta
Partner

Caio de Souza Loureiro
Partner

Adriana Ferreira Tavares
Counsel