iGaming Digest Aug 25 – Sep 1 2026: Prediction Market Crackdown, Brazil Tax Windfall

Prediction markets took the week’s heaviest fire, with courts and regulators on two continents moving at once. Brazil’s industry found an unlikely defence in its own tax receipts, and European regulators kept tightening at the municipal level.

Prediction Markets Under Pressure

United States Nevada won its Ninth Circuit case against Kalshi, a stinging loss that materially raises the odds of a Supreme Court hearing on event contracts — market pricing on that outcome spiked above 60% by Friday. Connecticut filed a fresh lawsuit the same week, arguing that sports-event contracts are sports betting by another name and are not shielded from state law by federal preemption.

Canada British Columbia’s Independent Gambling Control Office declared that much of what prediction market platforms offer constitutes unregulated gambling, and is therefore illegal in the province. The statement follows federal guidance excluding these contracts from securities and derivatives regulation, leaving them squarely in provincial gambling territory.

CFTC Polymarket withdrew its self-certification for NFL player availability markets at the CFTC’s request, which conflicts with the regulator’s stance on trading around player injuries. Kalshi has kept equivalent markets live — a visible split in how the two platforms read the same regulator.

Commercial momentum continues regardless Kalshi signed deals with the Dodgers and four more MLB clubs, putting nearly a quarter of the league in partnership with a prediction market operator. Sportradar expanded its Polymarket agreement to include premium data, streaming and integrity services across 20+ leagues, and DraftKings launched five-minute Bitcoin and Ethereum markets.

For operators: the legal picture is fragmenting by jurisdiction while the commercial one consolidates. If you are weighing an event-contract product, the question worth asking your counsel is not whether prediction markets are legal, but which regulator claims them in each market you serve.

Regulation & Enforcement (Europe)

Romania A Romanian city has banned new gambling halls outright, with existing venues facing closure by 2027. This follows the central government devolving licensing authority to local councils earlier in the year — a structural change that turns a single national relationship into dozens of municipal ones.

Estonia Prime Minister Kristen Michal has ordered parliament to re-evaluate the online gambling tax reduction passed in December 2025, citing budget shortfalls. Tax cuts granted in one fiscal cycle are proving reversible in the next.

United Kingdom Barking and Dagenham Council is revising its gambling policy to prioritise protection in areas of high deprivation, part of a broader pattern of local authorities acting where they already have powers, ahead of any national change to the aim-to-permit rule.

Sweden The licensed market reported a 5% rise in Q2 turnover, with state-run lotteries and slots contributing SEK 1.43 billion and holding roughly flat year on year. Growth is coming from the commercial side.

Ukraine Regulator PlayCity has tendered for a fully automated system to verify military status and restrict gambling access accordingly, alongside a new national strategy on gambling addiction.

For operators: the action in Europe has moved down a level. National licences increasingly get you into a country, not into every city inside it — factor municipal policy into GEO planning.

Brazil: Tax Receipts Versus Political Risk

Brazil The betting sector generated roughly €1.4bn in tax revenue in the first half of 2026, a figure that may prove the industry’s strongest argument as political hostility mounts from both government and opposition. One legislator is openly working to end legal sports betting within 180 days, barely two years after the Bets Law created the market.

For operators: Brazil remains the largest regulated opportunity in LatAm and simultaneously its least politically stable. Treat licence tenure as a variable, not a constant, when modelling payback.

Asia-Pacific

Macau August GGR slipped 1.2% year on year to $2.71bn, though it rebounded 8.1% from July.

Philippines Pagcor is launching an app to help players distinguish licensed operators from unlicensed ones, as its own Q2 gross gaming revenue fell 20.33% year on year — a decline that makes the channelling problem concrete rather than theoretical.

Australia New South Wales has proposed sweeping gambling reforms centred on player protection, spanning facial recognition and advertising restrictions.

For operators: Pagcor’s numbers are the clearest signal this week that enforcement gaps show up in regulated revenue before they show up in policy.

Africa

Eswatini An illegal gambling investigation has widened into an organised crime probe, with alleged links to politicians, officials, cryptocurrency transfers and an international fraud network.

Kenya AiA signed a three-year MoU with Kenyan trade body AGOK, aiming to bring experience from Kenya’s regulated market into wider African regulatory discussions.

M&A GiG Software is seeking a €8.5m raise to acquire 888Africa, marking its first return to B2C since pivoting to B2B in 2023.

Industry Insights

Allwyn Net revenue rose 27% in Q2, with the PrizePicks acquisition driving much of the growth.

Caesars Shareholders will vote in September on the Fertitta bid to take the operator private.

Obituary The industry paid tribute to Paul Gauselmann, founder of Merkur Group, who died aged 91 after a career spanning nearly seven decades.

The Week in Summary

The through-line is jurisdictional fragmentation. Prediction markets are being claimed by different regulators in different countries and reaching opposite conclusions; Romanian licensing has devolved to city councils; Estonia is reopening a tax settlement eight months old. For anyone planning market entry, the unit of regulatory analysis keeps getting smaller.