Regulators are tightening the screws on multiple fronts this week, with prediction markets squarely in the crosshairs across courtrooms, congressional hearings, and emerging markets.

A US Senate hearing reignited the sports event contracts debate while a federal appeals court sent state enforcement cases back to local jurisdictions, deepening a circuit split now headed toward Supreme Court review. Southeast Asia added another nationwide block on crypto-based prediction platforms, and a US state moved decisively to criminalise market manipulation while simultaneously banning dual-currency sweepstakes operators. Elsewhere, World Cup advertising restrictions are being reinforced across Europe, Brazil clamped down on credit-funded deposits, and Brussels floated a continent-wide gambling levy projected to raise billions annually.

Let's dive into this week's Regulation Roundup!

Prediction Markets

• Senate No Sure Bets hearing puts prediction markets at the centre of US sports betting debate.
  
  The Senate Commerce Subcommittee on Consumer Protection, Technology, and Data Privacy convened its long-awaited hearing on May 20, with Chair Marsha Blackburn signalling more sessions to come. American Gaming Association CEO Bill Miller used his testimony to brand sports event contracts as backdoor betting operations that bypass state licensing, integrity safeguards and tax obligations, while former Congressman Patrick McHenry argued for the Coalition for Prediction Markets that the CFTC already provides robust oversight. Republican and Democratic senators alike pressed Kalshi and Polymarket on whether sports-based event contracts should be regulated as gambling, with multiple competing bills now in play.

• Ninth Circuit denies Kalshi and Polymarket stay requests, sending Nevada and Washington gambling cases back to state court.
  
  On May 22, a Ninth Circuit panel rejected attempts by Kalshi and Polymarket to halt state enforcement actions in Nevada and Washington, finding that the CEA preemption defence is an affirmative defence and cannot by itself create federal jurisdiction. Polymarket's federal officer removal theory was also dismissed, with the court noting that mere CFTC compliance does not turn a private platform into a federal actor. The decision creates a working circuit split with the New Jersey appeals court that upheld Kalshi's injunction, and accelerates the path toward Supreme Court review of state authority over event contracts.

• Indonesia blocks Polymarket as crypto prediction market following bets on President Prabowo's potential exit.
  
  Indonesia's Ministry of Communication and Digital Affairs ordered nationwide blocks against Polymarket on May 25, calling the platform an online gambling site disguised as a prediction market and confirming that crypto-based architecture does not change its gambling classification under Indonesian law. The action came after a viral contract on whether President Prabowo Subianto would resign before his October 2029 term ends drew roughly 46,000 dollars in trading volume. Polymarket is now blocked in more than 33 jurisdictions, joining India, Brazil and Singapore among recent blockers.
  

Sweepstakes

• Tennessee Governor Bill Lee signs sweepstakes casino ban and prediction market manipulation felony in same week.
  
  Governor Lee signed SB 2136 on May 22, making Tennessee the ninth US state to outlaw dual-currency sweepstakes casinos, with Attorney General Jonathan Skrmetti gaining enforcement powers under the Consumer Protection Act. Lee separately signed SB 1992, creating a new Class E felony for anyone who intentionally influences the outcome of an event while participating in a prediction market contract tied to it, making Tennessee one of the first US states to legislate directly on prediction market integrity. The sweepstakes ban took effect immediately while the manipulation felony establishes a template that other states are expected to follow.

Enforcement and Compliance

• Singapore Gambling Regulatory Authority censures Resorts World Sentosa over internal control failure.
  
  The Gambling Regulatory Authority issued a Letter of Censure to the operator of Resorts World Sentosa during the week, citing failure to implement a specified internal control approved under the 2013 Casino Control (Internal Controls) Regulations. The regulator declined to detail the specific lapse but used the censure rather than a financial penalty, in contrast to the SG$75,000 fines issued against the operator for broader systems failures in fiscal 2020 and 2021. The action was the only enforcement step disclosed by the GRA for the 12 months ended March 2026, reinforcing Singapore's tightly supervised but proportionate compliance posture.

• Belgium and Netherlands regulators issue formal World Cup gambling-ad warnings to licensed operators.
  
  Belgium's Kansspelcommissie reminded licensees on May 20 that Articles 60 and 61 of the Gambling Act remain in full force during the 11 June to 19 July FIFA World Cup, prohibiting bonuses, free bets, cashback and almost all gambling advertising outside operators' own websites and search engines. The Netherlands Gambling Authority chairman Michel Groothuizen separately wrote to all licensed operators, citing increased gambling activity around the 2022 World Cup and 2024 Euros and confirming intensified monitoring of advertising targeting young adults and vulnerable groups. France's ANJ has also flagged a more than 25 percent year-on-year jump in operator marketing budgets ahead of the tournament.

• UK Gambling Commission defends frictionless financial risk assessments ahead of June rollout.
  
  Speaking at the Lotteries Council Annual Conference on May 21 and at the Clarion Payment Providers Summit a day earlier, Director of Policy Ian Angus said the financial risk assessment regime will affect fewer than 3 percent of active gambling accounts and that 97 percent of triggered checks should be completed without friction. The Commission also pointed to the 26 million pound Treasury enforcement package, 741 cease and desist notices and more than 1,100 website takedowns as evidence that licensed operators benefit from a parallel crackdown on illegal sites. Racing representatives and some MPs continue to call for ministerial pause, citing analyst projections that UK black market staking could reach 33 billion pounds over three years.

Emerging Markets and Tax/Legislative Changes

• Brazil tightens financial rules to restrict Pix Crédito on online betting platforms.
  
  The Brazilian government formalised on May 25 a tighter set of rules that close off Pix Crédito as a deposit method on regulated online betting platforms, building on the Novo Desenrola debt relief framework introduced earlier in the month. Article 16 of the underlying provisional measure bans credit operations directly linked to placing bets, and a parallel audit by Folha de Sao Paulo had shown that major banks including Bradesco and Banco do Brasil were still permitting credit transfers into betting accounts as of mid-May. The clampdown sits alongside the Raul Jungmann Law, which now empowers regulators to block bank accounts and Pix flows tied to illegal operators.

• EU Parliament debates online gambling levy as new EU own resource projected to raise EUR 2 to 4 billion a year.
  
  MEPs held a plenary debate on May 20 on a proposal to introduce a dedicated EU own resource based on online gambling and betting, with Budget Commissioner Piotr Serafin confirming that the Commission is assessing the option alongside levies on digital services and crypto assets as part of the next Multiannual Financial Framework. Romanian MEP Victor Negrescu, who is promoting the initiative, said an EU-level levy could raise between 2 and 4 billion euros a year for education, youth, mental health and addiction prevention programmes. Opponents from EPP, ECR and other groups raised subsidiarity, competitiveness and national tax sovereignty concerns, with any package targeted to be operational by 1 January 2028.

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