Brazilian Regulator Flags "Regulatory Grey Zone" as Prediction Market Giant Kalshi Enters Market via XP International Deal

Regulator SPA warns no Brazilian companies are authorized for prediction markets following Kalshi's entry via XP International in 2026.

By: AXL Media

Published: Mar 12, 2026, 11:04 AM EDT

Source: The information in this article was sourced from iGB

A Landmark but Controversial Entry

On Monday, the US-based prediction market Kalshi announced a strategic partnership with the Brazilian brokerage firm XP International. This deal marks Brazil as the first non-US market to access Kalshi’s platform, allowing the local population to trade on the outcomes of real-world events. However, the celebratory launch was immediately met with technical scrutiny from the Secretariat of Prizes and Bets (SPA), which monitors the country’s gambling and betting landscape. The SPA confirmed it is "continuously and technically" analyzing the situation to prevent the formation of an unregulated shadow market.

Jurisdictional Uncertainty: SPA vs. CVM

A primary challenge facing Kalshi’s entry is the lack of a formal regulatory framework for prediction markets in Brazil. Unlike the United States, where these markets fall under the Commodity Futures Trading Commission (CFTC) as derivatives, Brazil has not yet determined if they should be classified as financial instruments under the Securities and Exchange Commission (CVM) or as betting products under the Ministry of Finance’s SPA. Legal experts describe this as a "regulatory grey zone," noting that while it offers opportunities for risk-takers, it lacks the consumer protections found in the recently regulated iGaming and fixed-odds sectors.

Industry Pushback and Competitive Concerns

Traditional fixed-odds betting operators, who officially launched in the licensed Brazilian market on January 1, 2025, have already flagged concerns to the SPA. These operators are currently navigating a challenging environment characterized by a gradual tax increase—set to reach 15% by 2028—and recent political pressure. Industry leaders argue that if prediction markets are allowed to operate without the same tax burdens and compliance requirements as sports betting, they could siphon away consumers and create an unlevel playing field.