CVM authorises B3 to launch event contracts

Brazil has formally approved its first regulated prediction market, with the country’s securities regulator giving B3 the green light to offer event-based contracts to professional investors.

The approval came from the Comissão de Valores Mobiliários (CVM), which confirmed B3 will operate under securities law rather than gambling regulation.

B3, Brazil’s main stock exchange, plans to launch the platform in the first quarter of the year.

Limited to professional investors

Initially, access will be restricted to investors holding more than R$10 million in assets.

The first products will include binary “yes” or “no” options tied to:

  • The US dollar
  • The Ibovespa index
  • Bitcoin

By structuring these contracts as financial derivatives, the CVM has placed the market firmly within the securities framework, avoiding classification under Brazil’s sports betting regime.

Securities law over gambling regulation

Brazil’s online betting market officially launched last year under the Secretariat of Prizes and Bets within the Ministry of Finance. However, the CVM decision keeps B3’s event contracts outside that structure.

This creates a clear regulatory distinction:

  • Sports betting falls under gambling legislation
  • Prediction contracts on financial outcomes fall under securities oversight

Still, the broader regulatory picture remains complex. Other entities — including Brazil’s Central Bank and the Ministry of Finance — could potentially claim jurisdiction depending on how products evolve.

Grey market operators already active

Although this marks the first federally approved prediction platform, similar offerings have already appeared in regulatory grey areas.

Operators such as Previas and Palpitada have provided futures-style contracts, while Futuriza has announced plans to launch contracts covering politics, economics, sports and entertainment.

The CVM’s approval of B3 may now set a precedent for how these markets are supervised moving forward.

US legal battles offer cautionary tale

Brazil’s move contrasts sharply with the ongoing legal turmoil in the United States.

There, operators such as Kalshi operate under federal oversight from the Commodity Futures Trading Commission (CFTC).

However, multiple state regulators argue that sports-related event contracts resemble gambling and violate local betting laws. The dispute has triggered more than 20 lawsuits across several states.

Recent rulings have been mixed. Courts in states including Maryland, Massachusetts, New Jersey and New York have sided with regulators challenging prediction market expansion. Meanwhile, a California case involving tribal gaming law delivered a favourable outcome for Kalshi.

The legal uncertainty has left the US market in limbo, with federal and state authorities contesting jurisdiction.

A different path for Brazil?

By explicitly classifying prediction markets as securities from the outset, Brazil may avoid the kind of jurisdictional conflict seen in the US.

Still, questions remain over whether political or sports-based event contracts could blur the line between financial derivatives and gambling products in the future.

For now, Brazil’s approach signals regulatory openness — but within tightly controlled boundaries aimed at sophisticated investors.

Summary

Brazil’s securities regulator has approved B3 to launch the country’s first prediction market, limiting access to professional investors and classifying contracts as financial securities. While similar products have operated in grey areas, this marks the first federally sanctioned framework. Unlike the US, where legal battles continue over jurisdiction, Brazil has chosen a clearer regulatory path — at least for now.