The emergence of prediction market platforms in Brazil has suffered a setback following intervention by the National Monetary Council (CMN).

The agency, which oversees Brazil’s financial markets and monetary policy, has determined that derivatives cannot be tied to sporting, political, or entertainment events.

The ruling will come into effect on 4 May through Resolution No. 5,298, authorised by Gabriel Galípolo, President of the Banco Central do Brasil (BCB).

Under the policy, no financial institution may develop or offer contracts linked to events of a political, electoral, social, cultural, or entertainment nature.

The CMN’s decision aligns with the protections set out in the Bets Law (Law No. 14.790/2023), which serves as the federal framework for online gambling and sports betting in Brazil, implemented on 1 January 2025.

In its statement, the CMN noted that the decision “comes amid the popularisation of prediction market platforms in Brazil, which operate without their own regulation, unlike the betting sector.”

Attention now turns to US-based prediction market operator Kalshi, which in January secured access to Brazil via a partnership with XP Inc., positioning its platform as an investment product for Brazilian consumers.

At the time of the launch, reports indicated that the Secretariat of Prizes and Betting (SPA) had received multiple complaints from licensed operators, urging regulatory intervention to block Kalshi’s entry.

The Brazil rollout marked Kalshi’s first expansion into international markets. The company was co-founded by Luana Lopes Lara (COO), who in 2025 made headlines as the youngest ever self-made female billionaire.

In the US, Kalshi recently completed a $1bn funding round, doubling its valuation to $22bn. The company’s total venture funding now exceeds $2.5bn as of April 2026.

Kalshi’s valuation surge has intensified comparisons with US-listed gambling Plc giants Flutter Entertainment and DraftKings, as investors weigh the future role of prediction markets against traditional sportsbook wagering

Despite the setback a regulatory gap remains for Kalshi and others. As stands the Brazilian Securities and Exchange Commission (CVM) is monitoring the sector, but no formal regulatory timeline for prediction markets has yet been established.

With the CMN restricting event-based derivatives, the window for prediction markets to operate in Brazil’s grey zone appears to be tightening. Kalshi’s entry into Brazil has exposed a regulatory fault line, as authorities move to close the gap between financial markets and the current framework of the Bets Law , that is due to be revised and overhauled by President Luiz Inácio Lula da Silva in 2026.

Last week, Lula told national media that in May he will publish his own ‘Presidential Decree‘ to introduce a new online gambling regime in Brazil, restricting those in financial assistance and debt from participating in the market.