CMN Resolution 5.298 blocks prediction markets

Brazil’s National Monetary Council published Resolution 5.298 on April 24, barring prediction-market derivatives in Brazil when they track sports, politics, entertainment or other non-financial events. (bcb.gov.br) The text says the ban covers contracts whose underlying event is a real sports event, an online game event, or a real or virtual political, electoral, social, cultural or entertainment event. It takes effect on May 4, 2026. (bcb.gov.br) The same resolution leaves room for derivatives tied to economic and financial benchmarks, including price indexes, interest rates, exchange rates, credit-risk measures, commodities and other verifiable financial variables. The Securities and Exchange Commission of Brazil, known as the Comissão de Valores Mobiliários, can decide what counts as a valid benchmark. (bcb.gov.br) That distinction is the core of the policy. Brazil is not banning every event contract; it is drawing a line between financial hedging and speculation that officials say functions like gambling. (agenciabrasil.ebc.com.br) (gov.br) The Finance Ministry said prediction platforms “operate under the same logic” as fixed-odds betting when they sell payouts on future events with predefined prizes. It said those products can no longer be presented as investments when they fall outside financial benchmarks. (gov.br) That position leans on Brazil’s betting law, Law 14.790, enacted on December 29, 2023, which defines fixed-odds betting and gives the Finance Ministry authority over that market. Resolution 5.298 borrows the law’s definitions for sports and online-game events. (planalto.gov.br) (bcb.gov.br) The rule also reaches contracts traded abroad if they are offered in Brazilian territory. That matters for offshore platforms because Article 4 says the prohibitions apply to foreign derivatives offered in Brazil, subject to Securities and Exchange Commission regulation. (bcb.gov.br) On the same day, the government said Anatel had already blocked access to platforms on a list of 28 companies tied to prediction markets. The Finance Ministry said the wider betting crackdown has already blocked more than 39,000 illegal sites. (gov.br 1) (gov.br 2) Brazilian outlets said the affected platforms include foreign names such as Kalshi and Polymarket, though the official resolution does not name companies. Valor Investe reported Anatel removed 27 prediction-market sites after the government’s decision. (valorinveste.globo.com) The practical result is narrower than some early social-media posts suggested. Resolution 5.298 does not outlaw all prediction markets in Brazil; it blocks non-financial event contracts and preserves contracts linked to economic and financial reference points. (bcb.gov.br) (agenciabrasil.ebc.com.br) What happens next sits with the Securities and Exchange Commission and the Finance Ministry. The council wrote the boundary, and enforcement now turns on which contracts Brazil treats as finance and which it treats as betting. (bcb.gov.br) (gov.br)