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An unequivocal decision for prediction markets in Brazil

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 Brazil’s National Monetary Council Resolution 5.298 marks a clear regulatory boundary for prediction markets such as Polymarket and Kalshi.

In this analysis, Carlos Akira Sato examines how the measure reflects a deeper shift in Brazil’s financial architecture, redefining what qualifies as a legitimate financial instrument and setting limits on the financialisation of non-economic events.

Carlos Akira Sato is co-founder of Fenynx Digital Assets and a specialist in regulated markets, financial infrastructure and responsible gambling.

In this op-ed, he argues that Brazil’s Resolution 5.298 is less about banning Polymarket and Kalshi than about defining the boundaries of the next generation of the financial system.

Brazil’s National Monetary Council Resolution 5.298 sets an unambiguous limit for platforms such as Polymarket and Kalshi in the country. The conclusion is straightforward: these models no longer find regulatory space in Brazil. But the significance of the decision lies not in the prohibition itself,  it lies in what it reveals about the future of financial architecture.

Resolution 5.298 does not explicitly address prediction markets. It operates at a deeper level, redefining what can be considered a legitimate financial instrument. By requiring that contracts be tied to economic variables with objective price formation, the regulator eliminates the possibility of structuring instruments, however sophisticated in appearance, based on political, social or behavioural events. This is not a peripheral adjustment. It is a conceptual repositioning.

For years, platforms like Polymarket and Kalshi thrived precisely on ambiguity. They are not traditional bookmakers, nor do they fit neatly as derivatives exchanges. They operate in an intermediate territory,  contracts based on probabilities, financial language and an implicit promise of efficient price discovery about the future. That grey zone was always their main asset, and their greatest regulatory risk. What Brazil has now done is eliminate it.

The most sophisticated aspect of the resolution lies in its design. The CMN did not target the technology, the format of the platforms, or their location. It targeted the essence: the nature of the risk being traded. In doing so, it made irrelevant whether the operation occurs through bilateral contracts, offshore platforms or blockchain-based protocols. If the risk is not economic, the contract is not admissible. It is a form of regulation that privileges substance over form — and is, for that reason, likely to prove more resilient.

This decision projects effects well beyond the gambling debate. It speaks directly to the discussion around tokenisation and the widely held idea in recent years that any event could be converted into a digital asset. Brazil signals the opposite. Innovation is welcome, but not unlimited. Tokenisation finds legitimacy when anchored in the real economy, credit, receivables, productive assets, and loses it when it attempts to capture behaviour, opinion or social events as the basis for trading.

It is at this point that the resolution also reveals an institutional tension. The normative text itself assigns to the CVM the responsibility of issuing complementary regulation. The choice is legally understandable, but institutionally questionable.

If the regulator’s own diagnosis recognises that these are hybrid instruments, moving between derivatives, securities and fundraising structures, the absence of a joint initiative from the outset is notable. The option for sequential regulation, with the CMN setting guidelines and the CVM filling in the detail, introduces a lag that may temporarily reopen the very grey zone it intends to close.

The paradox is evident. The resolution is sophisticated in attacking the economic essence of contracts, but fragments regulatory execution by distributing competencies non-simultaneously.

In an environment where financial innovation occurs at the intersection of different regimes, banking, capital markets and, in certain cases, gambling, coordination ceases to be desirable and becomes necessary. The lack of synchrony may generate divergent interpretations, legal uncertainty and, above all, residual arbitrage opportunities.

Even so, the core of the decision remains solid. By restricting what can be considered a financial asset, Brazil establishes a silent but powerful limit on the financialisation of reality. Not every event can be turned into a contract. Not every expectation can be converted into a price. And not everything that can be tokenised should necessarily be traded.

To say that Polymarket and Kalshi cannot operate in Brazil is therefore correct, but it is only the surface. What is at stake is the definition of boundaries for the next generation of the financial system. A system that will continue to incorporate technology and innovation, but that, at least in the Brazilian case, will remain anchored in the real economy. And in that process, the quality of coordination between regulators will be as decisive as the clarity of the rules themselves.

Carlos Akira Sato is co-founder of Fenynx Digital Assets and a specialist in regulated markets, financial infrastructure and responsible gambling. In this op-ed, he argues that Brazil’s Resolution 5.298 is less about banning Polymarket and Kalshi than about defining the boundaries of the next generation of the financial system.

The post An unequivocal decision for prediction markets in Brazil appeared first on Americas iGaming & Sports Betting News.

Brazil

Brazilian Institute for Responsible Gaming Appoints Carlos Lima as its New Executive President

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The Brazilian Institute for Responsible Gaming (IBJR) has appointed Carlos Lima as its new Executive President. With extensive experience in Government Relations, Advocacy, and public policy development, the executive takes the helm of the organization at a pivotal moment for the consolidation of Brazil’s regulated fixed-odds betting and online gaming market.

As head of the Institute, Carlos Lima will be responsible for strengthening technical and institutional dialogue with the Federal Government, the National Congress, regulatory authorities, and civil society. His work will focus on improving the regulated environment and promoting the value of authorized operators that conduct their activities in compliance with Brazilian law.

“The maturation of Brazil’s betting market requires an approach grounded in data, transparency, governance, and legal certainty. The regulated environment is the most effective tool for ensuring consumer protection, preserving the integrity of the sector, and fostering its sustainable development,” said Carlos Lima.

According to the new Executive President, regulation represents a fundamental milestone in distinguishing authorized and supervised operators from illegal platforms that operate outside the law.

“Regulation serves as a seal of security for consumers and a benefit to society as a whole. By establishing clear rules, user protection mechanisms, and responsible gaming policies, it reduces the social and economic costs associated with the illegal market. Strengthening the regulated market means protecting citizens, creating jobs, attracting investment, and increasing public revenues,” he added.

Throughout his professional career, Carlos Lima has led strategic initiatives related to institutional relations, corporate governance, regulatory compliance, and sector-specific regulation in industries of significant economic and social relevance. His experience includes fostering collaboration between the public and private sectors on complex issues, always with a focus on building regulatory environments that are more transparent, predictable, and sustainable.

André Gelfi, co-founder of IBJR and one of the leading figures behind the regulatory process for the sector in Brazil, will continue to support the organization as a Board Member and Director. In this role, he will contribute to the continuity of the Institute’s institutional agenda and to the strengthening of the regulated market alongside the other members of the board.

Founded to promote a safe, responsible betting market aligned with international best practices, IBJR brings together some of the leading companies authorized to operate in Brazil. The Institute remains committed to safeguarding industry integrity, protecting consumers, and supporting the sustainable development of the sector across the country.

The post Brazilian Institute for Responsible Gaming Appoints Carlos Lima as its New Executive President appeared first on Americas iGaming & Sports Betting News.

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Grupo LBBR names Paulo Gasparotto as compliance director for Luck.bet, Start Bet and 1PRA1

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Grupo LBBR, operator of the betting brands Luck.bet, Start Bet and 1PRA1, has appointed Paulo Gasparotto as its new director of Compliance, the company said in a statement.

The group said the hire is part of a governance push aimed at meeting the requirements of Brazil’s regulated betting environment. Alongside the appointment, Grupo LBBR said it has established a dedicated structure focused on Compliance, anti-money laundering and counter-terrorist financing (PLD/FTP), and regulatory matters.

According to the company, measures implemented include strengthened internal controls, a review of policies and procedures, and upgrades to monitoring processes designed to prevent financial crimes. The operator also said it has increased integration across operational, legal, technology and regulatory teams.

“Estamos elevando o nível das nossas empresas com o fortalecimento de controles internos, revisão de políticas e aprimoramento contínuo dos mecanismos de monitoramento e prevenção a ilícitos financeiros. A proposta é atuar de forma proativa diante das exigências regulatórias, com uma estrutura sólida e integrada que assegure eficiência operacional, gestão de riscos e confiança para todo o ecossistema do negócio”, afirma Paulo Gasparotto.

Looking ahead, Grupo LBBR said it plans to continue developing its compliance and PLD/FTP program, strengthen its internal integrity culture, enhance risk management mechanisms, and consolidate regulatory processes to support sustainable growth.

The post Grupo LBBR names Paulo Gasparotto as compliance director for Luck.bet, Start Bet and 1PRA1 appeared first on Americas iGaming & Sports Betting News.

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MediaTroopers Commits to Serving Brazilian Regulated Market with Development of New Local Entity

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MediaTroopers, the leading digital marketing and customer acquisition firm, has doubled down on its commitment to serving Brazil’s regulated gaming market with the announcement of a new local entity, including a registered company, a front office, and local banking infrastructure.

The newly established entity will serve as a strategic bridge for MediaTroopers’ global partners, including operators, vendors, and financial institutions, seeking to enter the newly regulated Brazilian market. The local entity will also serve as a point of contact for active operators in the market, offering its tools as a local service hub to help operators enhance their business outreach in the region.

As Brazil’s regulated market continues to position itself as one of the most important regulatory opportunities for operators across the globe, MediaTroopers continues to cement itself as the go-to acquisition firm to help clients make the most of this growth by providing localized market access, operational support, relevant acquisition strategies, and targeted solutions designed to enhance performance in the region.

Through its local entity, MediaTroopers can continue providing services, such as localized player acquisition, media buying, affiliate strategy, and more, at a more regional level. For MediaTroopers, Brazil aligns with its broader strategy of delivering sustainable, compliant operations in high-growth markets.

 

“Brazil represents one of the most exciting growth opportunities in regulated iGaming, and MediaTroopers is fully committed to supporting operators in this market,” said Shmulik Segal, CEO of MediaTroopers.

“By establishing a local company, front office, and banking infrastructure, we are creating a stronger operational foundation for our clients. This presence allows us to act both as a bridge for international brands entering Brazil and as a service hub for active operators looking to scale responsibly and efficiently.”

The post MediaTroopers Commits to Serving Brazilian Regulated Market with Development of New Local Entity appeared first on Americas iGaming & Sports Betting News.

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