Lucía Gando, Editor of SBC Noticias, uncovers the legal and regulatory considerations behind BA courts’ decision to ban Polymarket and other prediction market platforms from Argentina
The decision represents a setback for prediction market ventures and their backers, but raises the broader question of whether the platforms can find an entry point in South America.
On Tuesday, Argentina became the first South American nation to impose an outright block on prediction market activities, following an investigation centred on Polymarket.
International media reported that courts in Buenos Aires had ordered a “federal block” of the platform, triggered by a case brought forward by LOTBA, the Buenos Aires City Lottery.
Media reaction framed the decision as a significant blow to the international ambitions of prediction market operators, adding to mounting controversies in South America.
The Argentine blocks follow Kalshi’s launch in Brazil earlier this month, a move immediately contested by incumbents of the Bets market. Both the industry and authorities see no ground for Kalshi to operate in Brazil.
Hence, whether in Europe or South America, the expansion of prediction markets appears as a critical objective to reaffirm the products’ unique status of being ‘derivative-based financial contracts’— a determination made by the US Commodity Futures Trading Commission (CFTC).
Buenos Aires Intervention
Buenos Aires courts have interrupted the manifest destiny of those backing prediction market ventures.
The question they are asking – Is US validation alone sufficient grounds to justify an entry point within South American jurisdictions and what lens should be applied when reviewing prediction markets viability and distinction from gambling?
The Buenos Aires lottery authority did not seek for courts to apply a distinction but to order a ‘systemic response’ on prediction markets and event contracts.
Its claim against Polymarket was focused on the platform’s lack of consumer protections. The authority believes that enforcement should be applied on the ground of public safety of engagement with a new digital platform.
LOTBA, acting in its capacity as a provincial gambling authority, asked the courts to treat Polymarket’s activities as a breach of Article 301 bis of Argentina’s Penal Code, which prohibits the organisation of unlicensed gambling.
The argument was simple: whatever the financial veneer, prediction markets replicate the essential mechanics of betting — users stake money on uncertain outcomes, prices reflect implied probabilities, and the operator facilitates the exchange.
In LOTBA’s view, these features do more than blur categories; they amplify risk. The absence of effective safeguards, identity checks, age verification and traceable payment controls renders such platforms vehicles for unlicensed gambling with little accountability and few protections for participants.
Environmental Issues
Crucially, the authority did not confine its request to Buenos Aires. It instead sought a nationwide intervention, reasoning that a digital product with borderless reach cannot sensibly be contained within provincial boundaries.
Fragmented oversight, in this context, amounts to no oversight at all. Argentina’s response, then, is less a doctrinal rejection of financial innovation than a practical judgement about the environment in which it operates.
The question for regulators was not whether prediction markets could, in theory, be classified as derivatives, but whether given their accessibility and undermined by a lack of controls, could prediction markets even qualify or function in practice as gambling platforms.
Argentina offers no copy/paste solution
Whether BA’s logic travels is another matter. Few South American jurisdictions combine Argentina’s patchwork of provincial licensing, coordinated lottery bodies and prosecutorial alignment. The ruling may set a precedent, but one that is not easily replicated.
For neighbouring markets such as Brazil and Mexico, the dilemma is unresolved: to treat prediction markets as financial instruments, and risk regulatory arbitrage, or as gambling, and risk stifling a nascent form of digital trading.
For operators like Polymarket, entries into further Latin American markets remains possible – but increasingly fraught.
Argentina has, at the very least, shifted the terms of debate. The issue is no longer merely how to classify prediction markets, but how to control them within sprawling digital ecosystems.
Whether others follow suit will determine if these platforms take root in Latin America or find some form of entry point, as for now prediction markets remain marginalised.