CMN Resolution Restricts Prediction Market Contracts
Resolution No. 5,298/2026, issued by Brazil’s National Monetary Council (CMN) and in force since May 4, 2026, regulates the organization and operation of the derivatives market in Brazil.
In addition to consolidating principles designed to protect and preserve the integrity of that market, the Resolution introduces express prohibitions that affect event-based prediction market models.
What are derivatives?
Broadly speaking, derivatives are financial contracts whose value derives from the performance of an underlying asset or reference rate, such as interest rates, price indices, commodity prices, or the prices of assets traded on organized markets.
CMN Resolution No. 5,298/2026 does not define derivatives, but it establishes general guidelines for the organization and operation of the derivatives market.
Within this framework, the Resolution prohibits certain derivatives offerings, particularly those involving so-called prediction markets.
What are prediction markets?
Prediction markets are platforms that typically allow users to take a position on the outcome of future uncertain events, with prices fluctuating according to participants’ expectations.
Which contracts are now prohibited?
CMN Resolution No. 5,298/2026 prohibits the offering and trading, in Brazil, of derivative contracts whose underlying assets reference:
- real-world sports events;
- virtual online gaming events; and
- any real or virtual events relating to political, electoral, social, cultural, entertainment, or other matters that, in the view of the Brazilian Securities and Exchange Commission (CVM), do not constitute an economic or financial benchmark.
The Resolution also provides that these prohibitions apply to all offerings made in Brazil, even if the derivative is traded abroad.
In practical terms, the prohibition is likely to affect prediction market structures that lack a discernible economic or financial basis. At the same time, the rule appears, in principle, to preserve the possibility of trading of derivatives linked to traditional economic and financial variables traditionally used in Brazil’s banking and capital markets.
The Resolution also grants the CVM authority to issue supplementary rules concerning the characterization of economic or financial benchmarks and the implementation of the Resolution.
What does the Treasury Department say about prediction markets?
In parallel, the Treasury Department issued the Technical Note SEI No. 2958/2026, addressing the characterization of prediction market services.
The Technical Note describes how these platforms operate and notes that they are often presented as “financial instruments” or “event contracts.” However, based on their structural features, the Ministry considers that these arrangements are more akin to fixed-odds betting, a form of lottery-based betting already regulated in Brazil.
Accordingly, the Technical Note argues that, when offered to users in Brazil, the operation of prediction markets may amount to the illegal offering of fixed-odds betting, regardless of the terminology used by the platform.
The document also notes that these structures are commonly used for sports events and for a wide range of other topics — including political, social, and cultural matters —raising concerns regarding consumer protection and market integrity.
