World Cup Puts $10bn Prediction Markets Under Regulatory Fire
The 2026 FIFA World Cup is becoming the first major sports stress test for prediction markets since Kalshi and Polymarket entered mainstream sports trading. Bernstein analysts estimate the tournament could generate about $3bn in additional wagers and drive up to $10bn in betting volume across sports betting and prediction market operators. That volume is arriving as governments in Spain, Indonesia, India and Brazil move to restrict access to these exchanges.
Brazil shut down 27 prediction market sites in April, including Kalshi, shortly after the company launched there. Spain, Indonesia and India have also restricted access to Kalshi and Polymarket in recent months. The moves were reported by Bloomberg and carried by The Straits Times.
The regulatory problem is classification. Prediction market contracts let users trade on future outcomes. Football markets often look similar to sports betting since users back match results, player performance or tournament winners.
Some regulators treat the products as gambling. Others see them as securities or derivatives.
That split matters commercially. Licensed sportsbooks face local tax, licensing, responsible gambling and integrity rules. Prediction exchanges can compete for the same sports audience while arguing they operate under financial market logic rather than betting law.
The World Cup makes that tension harder to ignore. Piper Sandler analyst Patrick Moley wrote on June 15 that the tournament was “like the Super Bowl every day” for Kalshi and was driving record daily volumes.
Polymarket recorded about $2.8bn in notional trading volume across its international and US exchanges in the first week of June. That was up from $2.1bn a week earlier, according to Dune Analytics data cited by Bloomberg. Kalshi reported about $4.5bn over the same period, up from $4.2bn.
Blocking prediction markets is proving harder than issuing restrictions. India’s government said users had accessed “illegal and blocked” prediction markets through VPNs. Officials asked internet providers to cut access to the sites. Crypto funding also makes local payment controls less effective.
The issue goes beyond access. Critics argue that sports event contracts create insider information risks, especially around injuries, team news or private federation decisions.
Chris Holland, partner at Singapore consultancy HM Strategy, told Bloomberg the new element is not betting itself but the contract structure. His warning was direct: “That gap is an open invitation to insiders.”
Operators are trying to answer that criticism. Polymarket has partnered with blockchain analytics firm Chainalysis to monitor suspicious trades. A Polymarket spokesperson said the company wants to work with Spain, Brazil and other countries on responsible market structures, transparency and user protection.
Opinion Labs is backed by Binance co founder Changpeng Zhao’s family office YZi Labs. The company said it has restricted access in several jurisdictions and blocked sanctioned addresses. Chief investment officer Alex Chan said the company is working with local authorities on compliant local products.
Kalshi also pushed back on the idea that it lacks controls. International counsel Valeria Vouterakou told Bloomberg that Kalshi maintains safeguards including customer identification and employee disclosure requirements. She said the company is in talks with regulators in jurisdictions where it wants to expand. Limitless, backed by Coinbase Ventures, did not respond to Bloomberg’s request for comment.
The competitive race is already widening. Newer prediction market operators are expanding globally. Some exchanges have signed marketing deals with football leagues and teams ahead of the tournament to capture demand.
For gambling regulators, the question is now practical rather than theoretical. A product that takes mass market sports money, offers tradeable exposure to match outcomes and competes with licensed betting operators will draw gambling scrutiny. That is true even if the contract is written in financial market language.
💡 TGJ Take
The World Cup is turning prediction markets from a financial regulatory debate into a direct sports betting issue. For licensed operators, the risk is not just lost handle. It is also competition from exchanges that may not carry the same tax, safer gambling and integrity costs. Regulators should focus on product use, not product label. If consumers use a football contract like a bet, the sector should expect betting style rules to follow.
