How Are Prediction Markets Expanding Into Latin America?

Prediction markets are entering Latin America through Brazil, where Kalshi launched in March 2026 via a partnership with XP International — one of the country's largest brokerage firms. The move marks Kalshi's first international expansion and immediately triggered a regulatory and industry debate that mirrors the controversies playing out in the United States, but with distinctly Brazilian complications.

The Kalshi-XP International Deal

On March 9, 2026, Kalshi announced that Brazilian investors could access prediction market contracts tied to economic outcomes — inflation, interest rates, and similar financial variables — through XP International's brokerage infrastructure. The partnership positions prediction markets as a financial instrument rather than a gambling product, a framing that has significant regulatory implications.

Brazil is a strategic first market for several reasons:

• Large, digitally active population with high smartphone penetration and growing comfort with online trading platforms
• Emerging but unsettled regulatory environment for online betting, creating both opportunity and ambiguity
• Strong political engagement that makes event contracts on elections and policy outcomes naturally compelling

The Regulatory Puzzle

The core challenge in Brazil is that nobody is entirely sure which regulator should oversee prediction markets. At least three bodies have potential jurisdiction:

Secretariat of Prizes and Bets (SPA)

Brazil's gambling regulator has said it is "monitoring the situation" following Kalshi's launch and noted that no Brazilian companies are currently authorized to offer prediction markets. If prediction contracts on sports or entertainment are classified as betting, they'd fall here.

Brazilian Securities Commission (CVM)

Contracts tied to economic variables like inflation and interest rates look more like financial derivatives, which would place them under CVM oversight — similar to how the CFTC regulates Kalshi in the United States.

Superior Electoral Court (TSE)

Contracts on election outcomes could be prohibited outright by the TSE, which tightly controls anything that could be perceived as influencing or profiting from electoral processes.

Legal experts in Brazil suggest regulation may ultimately be split across all three bodies depending on the contract type — a fragmented approach that could create inconsistencies and compliance burdens for operators.

Industry Reaction

Brazilian betting operators have expressed mixed views. Some see prediction markets as a natural complement to fixed-odds betting. Others worry about regulatory overlap and the blurring of lines between financial trading and gambling — particularly in a market where the fixed-odds betting framework is still being built.

The Brazilian Institute of Responsible Gaming (IBJR) has argued that prediction markets should comply with existing fixed-odds betting legislation. Others, including legal advisors working with licensed operators, have cautioned against rushing regulation.

As one industry lawyer put it, poorly tailored regulation could be worse than no regulation at all — shoehorning prediction markets into existing gambling or financial frameworks risks creating rules that don't fit the product.

What This Means for Operators

For B2B platforms and intelligence layer providers, Latin American expansion represents both opportunity and complexity:

• Multi-jurisdictional compliance — operators will need to navigate gambling, financial, and potentially electoral regulation simultaneously
• Local partnerships are essential — Kalshi's XP International deal shows that entering through established local financial infrastructure is the most viable path
• Product positioning matters — how prediction markets are framed (financial instrument vs. gambling product) will determine which regulatory regime applies
• The Brazil precedent will influence the region — how regulation develops here will signal what Mexico, Colombia, Argentina, and other Latin American markets can expect

What Comes Next

Brazil's approach to prediction market regulation is still forming. No formal framework exists yet, and the SPA, CVM, and TSE are all still assessing their respective roles. The most likely near-term outcome is a period of regulatory uncertainty where operators proceed cautiously while waiting for clearer guidance.

For the broader prediction market industry, Brazil is a test case for international expansion into regulated markets with complex, multi-layered legal systems — a challenge that will repeat across every new geography.

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Adkuu tracks prediction market expansion and regulatory developments across global iGaming markets.