Brazil bans prediction markets nationwide

Brazil draws a nationwide boundary

Brazil has banned prediction markets nationwide, with Polymarket and Kalshi shutting down in the country, according to HackerNoon. Banco Central do Brasil and the National Monetary Council published Resolution №5,298, prohibiting derivative contracts tied to sports, politics, gaming, cultural events and social outcomes. Regulators cited investor protection, market integrity and risks from arbitrage and speculation. HackerNoon describes the resolution as having been published “yesterday,” but the supplied report does not establish an unambiguous calendar date.

The move makes Brazil the third Latin American country to ban prediction markets, after Argentina and Colombia, HackerNoon reports. Portuguese regulators also blocked Polymarket earlier this year, while the platform’s own documentation lists restrictions in more than 30 countries. In the United States, the Commodity Futures Trading Commission (CFTC) has taken the opposite position against state restrictions, suing Arizona, Illinois and Connecticut over limits on access to platforms including Polymarket and Kalshi.

Manipulation and confidential information

The Brazilian decision comes against a backdrop of questions about whether traders can influence the events on which their contracts depend. HackerNoon describes two Paris temperature markets in which Polymarket paid $14,000 on April 6 and $20,000 on April 15 after unexpectedly high readings at a single Météo-France sensor at Charles de Gaulle Airport. Meteorologists ruled out natural causes as a plausible explanation; the leading theory was that somebody applied an unidentified heat source, possibly a cordless hair dryer. According to the report, Polymarket did not reimburse losing traders and subsequently changed the airport used for resolution.

A separate case involves a US Army Special Forces Master Sergeant who participated in planning Operation Absolute Resolve. According to HackerNoon, he opened a Polymarket account in December, 2025, then placed roughly $33,000 in bets between December 27 and January 2. Those positions backed a US invasion of Venezuela, Maduro’s removal by January 31 and Trump invoking the War Powers Act. He won $409,000. After Trump announced the capture of Venezuelan leader Nicolás Maduro, the soldier allegedly sought to delete his account, saying he had lost email access. The DOJ charged him with unlawful use of confidential government information, commodities fraud and wire fraud.

Not every incident cited by the outlet involved an actual questionable trade. At the 2026 Grammy Awards in Los Angeles, host Trevor Noah repeatedly said “potato” and jokingly congratulated @noah_22 on a supposed Polymarket win. The platform was offering a live market on words spoken during the ceremony, but “potato” was not an available choice. HackerNoon uses the episode to illustrate the potential conflict when a person can control an event that traders are trying to predict.

A divided regulatory picture

Political connections add another dimension to the US debate. Donald Trump Jr. is an investor in Polymarket and an adviser to both Polymarket and Kalshi, according to HackerNoon. Asked about the industry’s insider-trading controversy, the president compared the world to a casino. The report presents those relationships alongside the CFTC’s challenges to state restrictions, although they do not establish that the relationships caused the agency’s actions.

The case for prediction markets rests on their ability to aggregate financially backed judgments. HackerNoon credits Polymarket with anticipating the 2024 US presidential election result well before traditional forecasters. Its counterargument is that this forecasting model becomes less reliable when participants can influence outcomes or trade anonymously with limited oversight.

HackerNoon also argues that the sector lacks real-time surveillance, mandatory disclosure of large positions and a consistent approach to settling manipulated outcomes. It characterizes Brazil’s decision as treating these contracts as gambling rather than financial products. For prediction-market readers, the immediate distinction is between Brazil’s nationwide prohibition and the continuing US dispute over state restrictions.

What it means for prediction markets

• Access is a regulatory variable: Brazil’s prohibition adds another national restriction, while the CFTC is challenging restrictions imposed by individual US states.
• Settlement design matters: The Paris cases show how dependence on a single measurement source can expose contracts to disputed outcomes without reimbursement for losing positions.
• Information advantages raise legal risks: The charges involving Operation Absolute Resolve concern alleged misuse of confidential government information, not simply successful forecasting.
• Forecasting performance is not regulatory protection: The credibility gained from the 2024 US election does not resolve concerns about manipulation, surveillance or the classification of event contracts.