Predictive Markets: LatAm iGaming's New Regulatory Challenge
Within the framework of SAGSE South America 2026, doctors Carlos Fonseca (CEO of Gaming Law SAC) and Tomás E. García Botta (MF Estudio) presented an in-depth analysis of the phenomenon of predictive markets and their complex integration into the regional legal framework. These platforms, which allow users to trade binary contracts on future and verifiable events, have ceased to be a niche and have become a central topic of debate for regulators and operators. The concept is simple yet powerful: the market brings together buyers and sellers who assign a price to a prediction; if the event occurs, the contract pays a fixed value, and if not, its value drops to zero.
The financial logic of these contracts is based on binary options where the reference payout is typically $1 for each correct option.
Industry giants and their operational models
Currently, the global market is led by two exponents with very different operational philosophies that were analyzed during the talk:
- Kalshi: This platform operates under the supervision of the United States government and the CFTC (Commodity Futures Trading Commission). It positions itself as an intermediated financial derivatives market, offering a layer of institutional regulation that seeks to provide security to investors.
- Polymarket: Unlike the previous model, this platform uses blockchain technology to manage decentralized contracts. Its technical nature allows it to operate globally, although it poses greater challenges for authorities seeking to apply traditional local regulations.
The four elements that define these platforms as gambling games
One of the most critical points of the presentation was the regulatory classification of these markets. For the experts, there are four fundamental pillars that allow predictive markets to be categorized as gambling or betting games:
- Plurality: They require the participation of more than one subject for the market to exist.
- Competition: The dynamic intrinsically determines winners and losers, which often generates consequences even in the political sphere.
- Rules: It is essential to have a clear framework of rules that allows for the reliable determination of the event's outcome.
- Financial Exposure: This is the most decisive element; participants expose their assets to a future and uncertain event, seeking an economic gain.
The jurisdictional labyrinth in Latin America
The implementation of regulations for these predictive returns faces significant obstacles in the region. In federal systems, such as Argentina, there is a constant tension between federal and local competencies. While there is a tendency to push these activities towards a single gambling regulation, the private sector warns about the risks of unfair competition and a disproportionate increase in the tax burden.
Many of these games do not depend exclusively on chance, which creates gray areas in legislations that only contemplate binary categories (chance or no chance). The debate in Latin America is being strongly influenced by regulatory experiences in the United States and recent actions by specialized prosecutors, who seek to bring transparency to an activity that, according to experts, provides a real economic advantage when operated legally.
Tags: Peru, Prediction Markets, prediction markets regulations, prediction markets regulation