Why Are There No Prediction Markets Like Kalshi in Japan?
Prediction markets like Kalshi are built around a simple idea: you trade contracts tied to whether a future event happens. In the United States, that fits within a regulated derivatives framework. In Japan, the legal environment is much less accommodating.
Japan’s Gambling Laws
Japan’s Penal Code broadly criminalizes gambling. Article 185 punishes a person who “gambles” and Article 186 punishes habitual gambling and running a gambling place for profit. Japan has carveouts, but they are narrow and specific — public lotteries and certain state-authorized betting categories.
A prediction market contract can look a lot like staking money on an uncertain future event for a payout. Unless a platform fits into a specific legal exception or a recognized financial-services framework, it risks being treated as gambling rather than as a lawful exchange product.
Japan’s Financial Regulation Framework
Japan’s Financial Instruments and Exchange Act (FIEA) regulates securities and derivatives through licensed financial instruments businesses and exchanges. Even if a prediction market operator argued that its contracts are financial derivatives rather than gambling, it would still need to fit inside a tightly regulated framework.
Japan’s rules accommodate some speculative instruments, including binary options under regulated conditions, but that does not mean there is a general retail approval path for broad event-contract markets on politics, weather, geopolitics, or public events.
How the US CFTC Framework Differs
In the United States, Kalshi operates as a CFTC-regulated Designated Contract Market. The CFTC expressly recognizes event contracts as a category of derivative product, while also limiting certain topics. CFTC Regulation 40.11 prohibits event contracts tied to terrorism, assassination, war, gaming, or unlawful activity, but it does not ban all event contracts across the board. That creates a legal lane for prediction-style contracts to trade on a regulated exchange.
Japan does not have an equivalent retail framework that clearly authorizes a Kalshi-style venue for broad public-event contracts.
For more on how Kalshi’s regulatory structure works, see What Is Kalshi?
Are There Japanese Alternatives?
Not in the same sense as Kalshi. Japan has regulated derivatives markets and a regulated binary-options regime, and those are lawful under financial regulation when offered by properly registered firms. But that is not the same thing as a public prediction market where users buy and sell contracts on elections, policy decisions, or other yes/no outcomes. The closest legal substitutes are ordinary exchange-traded derivatives, some binary options products, or non-cash forecasting tools used for research or internal decision-making.
Japan has also been explicit that online gambling can still be illegal even when the operator is based overseas and lawful in another country.
Other Countries That Restrict Prediction Markets
Japan is not unique. Several other major countries restrict prediction markets because they classify them as gambling, tightly control derivatives, or both. Singapore’s Gambling Regulatory Authority operates under the Gambling Control Act 2022 and has treated unlicensed online event-betting platforms as unlawful. China maintains a hard anti-gambling stance and has repeatedly cracked down on online and cross-border gambling platforms.
The global picture is mixed: some countries leave room for regulated event contracts, while others treat them as prohibited betting activity unless specifically licensed or carved out by statute.
Frequently Asked Questions
Common questions about prediction markets in Japan and other restricted jurisdictions.
Can I use Kalshi from Japan?
Kalshi is available to U.S. residents only. Using Kalshi from Japan would not be supported by the platform and could raise legal issues under Japanese law.
Is Polymarket legal in Japan?
Polymarket's availability varies by jurisdiction. Japanese residents should consult local counsel before using any offshore prediction market platform, as Japan's gambling laws may apply regardless of where the platform is based.
Which countries allow prediction markets?
The United States has the most developed legal framework for prediction markets through CFTC regulation. The UK, Australia, and some EU countries also permit forms of event-based trading under their respective financial or gambling regulatory frameworks. Many countries in Asia, including Japan, China, and Singapore, either prohibit or do not have clear legal pathways for retail prediction markets.
Educational content only. This article is for informational purposes and does not constitute financial, legal, or tax advice. Laws and enforcement practices vary by jurisdiction and can change over time. Always consult qualified local counsel for advice on specific activities.