WLA demands regulation of prediction markets as sports betting
The World Lottery Association published a position paper raising the alarm about the rapid expansion of prediction markets and demanding that these types of products be subject to the same regulatory requirements as sports betting. The report, titled Prediction Markets: Unlicensed Betting by Another Name, argues that contracts based on sports or other event outcomes exhibit characteristics equivalent to betting and, therefore, should be regulated as such.
The proposal comes at a critical time for the region. Brazil has just defined its stance through Resolution 5.298 of the National Monetary Council, while Argentina, Colombia, Peru, and Mexico are closely observing the progress of platforms like Polymarket and Kalshi, which operate globally under a financial label but offer contracts on sports, political, and entertainment events. The WLA proposes closing this gap and establishing closer coordination between gaming regulators and financial market regulators.
Product Function Over Legal Label
The core of the proposal is regulatory: the WLA recommends adopting a criterion based on the product's function. According to this approach, any activity that offers an economic return linked to the outcome of a sporting event should be considered a bet, regardless of how it is presented by the operator. The association insists that regulators explicitly evaluate the legal nature of these products to avoid regulatory arbitrage between substantially similar activities.
The figures provided by the WLA show the scale of the phenomenon. The transaction volume in prediction markets exceeded USD 13 billion monthly by the end of 2025 and reached USD 26 billion in January 2026. More than 90 percent of this activity is linked to contracts related to sports events and other occurrences, a concentration that, for the association, confirms that these are bets in a functional sense, even if legally classified as financial instruments.
Sports Integrity and Responsible Gambling Under Pressure
The report identifies four areas of concern. The first is operation without adequate local licenses, which violates existing regulatory frameworks. The second points to sports integrity: the absence of monitoring mechanisms, suspicious transaction reporting, and restrictions on the use of inside information could facilitate the monetization of manipulated results, a particularly sensitive risk for regional confederations and local leagues.
The third point focuses on consumer protection. The WLA warns that, unlike regulated operators, many prediction markets do not require age verification, self-exclusion tools, spending limits, or responsible gambling measures. The fourth questions competitive conditions, because prediction platforms compete for the same users without facing the regulatory, tax, and social costs of licensed gambling, which distorts the business for authorized operators.
For Latin America, the debate is structural. The region is in the midst of deploying solid regulatory frameworks for iGaming and sports betting, with specific licenses, taxes, and contributions. If prediction markets consolidate under a financial label without regulatory equivalence, much of the formalization effort could be eroded. The WLA's stance provides ammunition for regulators who are already preparing specific regulations for this segment in key markets in the region.
Tags: Switzerland, WLA, prediction markets, Polymarket, Kalshi, WLA regulation