Brazil’s National Monetary Council (CMN) has issued Resolution No. 5,298, effective May 4, 2026, banning the offering and trading of prediction-market contracts tied to non-economic underlyings such as sports, political events, entertainment, or social outcomes.

Under the new rule, authorities have blocked at least 27 prediction-market platforms, including global giants Polymarket and Kalshi, on the grounds that their contracts replicate the structure of fixed-odds betting without a domestic Brazilian betting license. This enforcement action marks the beginning of the most turbulent stretch the country’s regulated betting sector has faced since the market officially opened on January 1, 2025.

What the resolution actually bans

The resolution treats prediction-market contracts as gambling, not financial derivatives, when the underlying event is non-economic. The Secretariat for Prizes and Betting at the Ministry of Finance (SPA) issued Technical Note SEI No. 2958/2026/MF to formalise the regulatory interpretation, with the operative line being that prediction-market platforms “simply reproduce the essential elements of fixed quota bets.”

But the carve-out is narrow. Contracts tied to economic indicators remain permitted under the existing financial-market framework. That covers inflation, interest rates, exchange rates, commodity prices, and equity benchmarks. Everything else falls inside the scope of the ban. Every NFL game contract. Every presidential-race contract. Every Oscars contract.

The Resolution rests on a single conceptual pivot: if a contract pays out based on the outcome of a sporting event or a political race, it is legally a bet. Consequently, it requires a fixed-odds betting license under Brazil’s January 2025 regulated regime. Because the 27 blocked platforms did not hold this license, their operations were deemed unauthorized.

The block list and the timing

The blocks were initiated on April 27, when authorities first ordered nationwide ISP-level access blocks against the named platforms. The full prohibition came into force on May 4 with the formal effective date of CMN 5,298. Polymarket and Kalshi were the highest-profile names on the list, both already operating without Brazilian licences. The rest of the 27 were a mix of crypto-native prediction venues and political event-contract platforms.

For Polymarket, the Brazil block lands the same week the platform relaunched in the US iOS App Store without invitation codes, marking its return to American retail after months of regulatory delay. For Kalshi, the Brazil block lands the same week US District Judge Michael Liburdi blocked Arizona from prosecuting the company at home. Two opposite jurisdictional moves, same week.

Lula, Guimarães, and the broader sector

The ban on prediction markets is the part of the story with the cleanest legal framing. The harder political signal sat in a May 12 CNN Brasil interview with José Guimarães, Brazil’s Minister of Institutional Relations, who said of the wider online-betting sector: “Either it ends, or we implement radical regulations.” Scenarios under discussion include outright suspension of betting activities or substantially stricter rules across the regulated market.

President Lula has staked out a similar position. In remarks tying online betting to household indebtedness, the president argued: “It’s not fair that women have to work even harder to pay off their husbands’ gambling debts.” The government has linked the sector’s rapid growth to borrowers taking loans to fund wagering, and the Desenrola Brasil 2.0 debt-renegotiation programme now blocks participants from betting platforms for a year as a condition of relief.

The licensed-operator side of the market sits separately for the moment. Apple updated its App Store policies on May 8 to allow fixed-odds betting apps in Brazil, but only for operators holding a valid SPA licence. Developers must include licence details in App Review Information and attach supporting documentation. The opening is real, but its scope is conditional, and the conditionality depends on the regulated regime surviving the political pressure that Guimarães flagged on May 12.

What to watch next

Three docket items shape the next phase. First, whether Polymarket or Kalshi mount legal challenges to the Brazilian block, which would test whether CMN 5,298 holds in Brazilian court against an international-derivatives argument. Second, whether the SPA’s Technical Note remains the working interpretation or gets reissued with tighter language. Third, whether Guimarães’ “radical regulations” framework translates into a concrete legislative proposal before parliament breaks for the second-half session. Each of the three runs on a different clock.