Brazil has classified prediction markets as illegal gambling, blocking 27 platforms in a coordinated regulatory crackdown.

The decision affects major operators including Kalshi and Polymarket, and was discussed on the iGaming Daily podcast. Hosted by Fernando Noodt, the episode featured Leonardo Biazzi and Ana Maria Meneses.

The trio outlined how Brazil’s Ministry of Finance and the National Monetary Council (CMN) moved together to close a regulatory gap. A new CMN resolution bans derivative contracts linked to sports, politics and cultural events, removing the ability for operators to position themselves as financial exchanges.

Meneses said the approach was deliberate and multi-layered, targeting prediction markets across different regulatory angles rather than reacting to isolated cases.

The impact on B2B suppliers has been immediate. Pre Label, which had built around 20 platforms for the market, has seen several sites shut down. Kalshi’s partnership with XP Inc. has also been affected.

Legal challenges are expected. Operators are likely to argue their products are forecasting tools and price discovery mechanisms.

The move is also linked to domestic politics. President Luiz Inácio Lula da Silva has taken a stricter stance on gambling amid concerns over consumer debt and ahead of October’s election. Finance Ministry official Dario Durigan confirmed there are no plans to regulate prediction markets separately.