Kalshi launches prediction markets in Brazil through XP partnership
Table of contents
- US platform Kalshi partners with Brazil’s XP to offer event-based contracts, marking the first international expansion.
- Initial focus on financial and economic events for clients with international accounts through Clear brokerage.
- Brazilian Institute of Responsible Gaming warns of regulatory circumvention risks and unfair competition.
Kalshi has announced the platform’s first international expansion through a partnership with XP International, marking Brazil as the initial market outside the United States for the prediction markets operator.
The partnership enables clients of XP’s Clear brokerage who hold international investment accounts to access event-based contracts tied to Brazilian economic indicators. XP manages BRL1.8tn in assets and serves more than 4.7 million customers, according to company data.
Kalshi will initially offer contracts focused on financial and economic events. The platform operates as a federally regulated exchange in the United States under Commodity Futures Trading Commission oversight, though it has faced legal challenges from multiple states over sports-related contracts.
Partnership targets Brazilian financial markets
The collaboration allows US investors and select XP clients in Brazil to trade yes-or-no contracts on events including inflation and interest rate movements. All transactions will process through XP’s US brokerage structure to operate within existing regulatory frameworks.
Lopes Lara, COO and co-founder of Kalshi, said:
“As a Brazilian, I couldn’t be more excited for XP to be Kalshi’s first brokerage partner outside the US. XP is one of Brazil’s largest financial institutions; expanding prediction markets to Brazil is an important step in providing more people around the world with access to fair, safe and regulated markets.”
Lucas Rabechini, head of financial products at XP, described prediction markets as having potential to be both innovative and disruptive. The brokerage has been expanding its product range beyond traditional equity trading to include derivatives, fixed income and alternative investments.
The platform selected financial and economic events as initial offerings given their potential to increase pricing efficiency and improve market information quality, according to company statements.
Brazil’s securities regulator, the Comissão de Valores Mobiliários, recently authorised exchange operator B3 to explore prediction markets structured as derivatives rather than gambling products.
US regulatory battles shadow expansion
Kalshi’s international launch comes as the platform navigates intense legal disputes in the United States over whether prediction markets constitute federally regulated derivatives or state-regulated gambling.
More than 30 state attorneys general, several tribal nations and industry groups have lined up against Kalshi in ongoing litigation and regulatory disputes over the scope of federal versus state authority.
Massachusetts gave Kalshi 30 days to cease sports wagering operations through geofencing requirements for sports-event contracts, while Tennessee ordered the platform to halt sports-event contracts viewed as unlicensed wagering.
The platform also faced scrutiny over affiliate marketing practices, dropping affiliate badges after X banned gambling promotions. Separately, Fanatics’ chief executive allegedly invested in Kalshi while the company developed its own competing prediction market product.
The CFTC has defended its authority over event contracts in court filings, arguing that its jurisdiction over derivatives preempts some state gambling claims.
Industry body raises regulatory concerns
The Brazilian Institute of Responsible Gaming responded to the announcement with warnings about prediction markets operating outside the country’s established regulatory framework for fixed-odds betting.
André Gelfi, president of IBJR, stated the organisation believes any transaction where consumers assume risk linked to uncertain sporting event outcomes constitutes betting regardless of terminology or technology employed. The institute participated in meetings with the Secretary of Prizes and Betting to discuss the regulatory implications.
The institute’s position holds that:
“When the consumer assumes risk conditioned to the uncertain outcome of a sporting event, we are facing a bet, regardless of the label, technology or contractual form used. Presenting these models as innovation only masks the legal risk, without changing the economic exposure.”
IBJR referenced international precedent in its position. In the United Kingdom, prediction markets involving sporting events fall under Gambling Commission jurisdiction and require appropriate licensing, similar to betting exchanges.
The United States has seen increased Commodity Futures Trading Commission supervision of event-based prediction markets with platforms operating under strict volume and value limitations.
The institute highlighted that Kalshi operates under legal challenges in states where sports betting is already regulated and licensed, creating what it describes as parallels to the regulatory discussion unfolding in Brazil.
Competition concerns for the regulated sector
The industry body argued that allowing prediction markets to operate without meeting the same regulatory requirements as licensed betting operators creates unfair competitive conditions.
Brazil structured comprehensive fixed-odds betting legislation under Law No. 14,790/2023 requiring operators to obtain licensing, pay taxes, implement responsible gambling measures and protect bettor data. More than 80 operators currently hold federal authorisation to operate in the country’s regulated market.
Licensed betting operators and IBJR have asked the Secretariat of Prizes and Betting to clarify how prediction markets should be classified under existing gambling regulations.
Industry representatives have raised questions about whether financial products that allow speculation on sporting event outcomes should require sports betting licences.
IBJR warned that permitting equivalent products to operate under different classifications undermines consumer protection, sporting integrity and competitive neutrality. The organisation stated:
“Allowing equivalent products to operate outside the betting regime means opening space for regulatory arbitrage, with consequences already known: unfair competition, weakening of consumer protection, threat to sports integrity and loss of tax revenue.”
The organisation noted that platforms like Kalshi and Polymarket already offer contracts related to Brazilian political and economic events, with users accessing services hosted outside the country without complying with national regulations. T
his lack of local supervision complicates oversight and enforcement efforts, according to the institute.
Regulatory framework considerations
IBJR emphasised that regulation should reflect the economic substance of operations rather than legal or technological forms used. The organisation called for Brazilian authorities to apply consistent treatment to products sharing similar characteristics and risk profiles.
XP is training advisory teams on prediction market fundamentals, with a focus on client education about risks and returns. The company aims to fully integrate the product over the course of 2026, subject to regulatory guidance from Brazilian authorities.
Kalshi indicated it expects to expand offerings beyond economic contracts once the initial product proves successful with Brazilian users.
The platform has experienced rapid growth in trading volumes in the United States, with company executives projecting international expansion could significantly increase activity.
Looking ahead
The development places Brazil at the centre of ongoing international debates about how regulatory frameworks should classify and oversee prediction markets.
As the country continues developing its legal betting market, questions persist about whether event-based contracts represent distinct financial instruments or constitute gambling products requiring sport betting licences.
The partnership between Kalshi and XP signals growing institutional interest in bringing prediction market products to Brazilian investors through established financial services channels.
The regulatory response from betting industry stakeholders suggests classification disputes may intensify as multiple sectors compete to define the legal boundaries of event-based trading.
International experiences offer contrasting approaches. The UK treats these products as gambling requiring explicit authorisation, while US federal courts have produced varying rulings on whether state gambling laws apply to CFTC-regulated platforms.
Brazil’s decision on how to regulate prediction markets could influence other Latin American jurisdictions considering similar frameworks.
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About the author
Bianca Máthe
Bianca Mathe joined the iGaming industry in 2018 and has since built extensive experience across multiple verticals, working with international gaming organizations on editorial, marketing, and media strategy. She brings a strong understanding of the regulatory, commercial, and technological forces shaping the global iGaming sector.
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