Prediction markets may be a fascinating new tool for forecasting and investment abroad, but here they squarely hit the regulatory wall of gambling law – a reminder that in the Philippines, not all bets on the future are ones you’re legally allowed to make.

The Rise of Prediction Markets

Prediction markets have gone from fringe to front page. In mid-October 2025, global trading volumes shot past $2 billion in a single week — fueled by contract bets on events ranging from who will be the next NYC mayor to who wins the Super Bowl.[1] Meanwhile, financial heavyweights are piling in: the Intercontinental Exchange (owner of the NYSE) announced it would invest up to $2 billion in Polymarket, valuing the business at roughly $8 billion.[2] What once looked like a niche betting-site experiment is now very much a hybrid of gaming, trading and real-world forecasting.” This global boom has not gone unnoticed in Manila. Our firm has received a growing number of inquiries asking a pointed question: Are prediction markets legal or regulated in the Philippines? Given the novelty of these platforms and the fragmented laws that could apply, it’s an important question to unpack. Below, we explain what prediction markets are, how other countries regulate them, and why Philippine authorities may treat them as a form of gambling under the law. We also consider if there’s any way a prediction market could operate here without falling afoul of gambling laws.

What Exactly Are Prediction Markets?

In simple terms, prediction markets are online platforms where people buy and sell contracts tied to the outcome of future events. Think of it like a mini stock exchange — but instead of trading shares in Jollibee or Ayala Land, you’re trading on the probability of things happening. For example, a contract might pay ₱1,000 if our Miss Philippines candidate wins the beauty pageant, or if a certain “Pinoy Big Brother” housemate wins the season, or even if a certain congressman involved in the flood control scandal returns to the Philippines by December. Participants can buy “Yes” shares (which pay out if the event happens) or “No” shares (which pay out if it doesn’t). The price of each share goes up and down as more people buy or sell — just like stock prices move with demand. If a “Yes” contract trades at ₱0.30, it means the market collectively thinks there’s roughly a 30% chance of that event occurring. If you buy at that price and your prediction turns out right, you earn ₱1 per share (a profit of ₱0.70). If not, your shares become worthless. Unlike a traditional betting pool where you wait for the result, you can trade in and out any time before the event happens — locking in gains or cutting losses as new information comes in, much like how local traders react to news in the stock or crypto markets. In essence, these markets harness the “wisdom of the crowd” to forecast events. In different markets, they have been used to predict elections, economic indicators, Oscar winners, even the outcomes of court cases. Advocates tout prediction markets as powerful tools for aggregating information and hedging against risks (e.g. a company might hedge political uncertainty by betting on election outcomes), whereas critics sometimes liken them to unregulated gambling dens on world events. This dual nature – part informational-financial instrument, part real-money wagering – makes their legal status a complex question.

Regulation Abroad: Financial Tool or Gambling Game?

Around the world, regulators have taken very different approaches to prediction markets, treating them either as a species of financial derivative or simply as another form of betting. In the United States, the line between trading and gambling is particularly blurry. The Commodity Futures Trading Commission (CFTC) generally views real-money event contracts as binary options or swaps, which are financial instruments. In fact, one platform (Kalshi) became the first federally regulated prediction market in the U.S. by registering as a designated contract market (an official futures exchange).[3] This allowed Kalshi to legally offer event-based contracts under federal law. Following suit, another popular platform, Polymarket – which initially operated in the crypto space without U.S. regulatory approval – obtained a CFTC no-action letter in 2025 clearing it to open to U.S. users without immediate enforcement risk. These developments reflect a federal willingness in the U.S. to treat prediction markets as regulated financial products rather than outlawed gambling. In fact, a New York-based attorney has argued that modern prediction platforms differ fundamentally from traditional gambling because they act as neutral marketplaces (matching traders who take opposite sides) rather than a “house” taking one side of a bet.[4] The platform simply earns transaction fees, much like a stock exchange, and does not profit from users’ losses – a structure which proponents say makes it more akin to trading than casino betting. Moreover, under U.S. law, a properly registered exchange’s contracts are explicitly exempt from state gambling laws due to federal preemption.[5] This has emboldened platforms like Kalshi to argue in court that state regulators (who oversee conventional gambling) cannot interfere with their operations – an argument some judges have upheld in early cases.[6] That said, not all U.S. authorities are on board. The CFTC itself has been cautious about certain types of markets – notably it attempted to block Kalshi from offering 2024 election outcome contracts, deeming them too akin to gambling and “contrary to the public interest.” Kalshi sued the regulator and won in late 2024, opening the door for political event trading.[7] Even after that victory, controversy continues, especially around sports-based markets. Several U.S. states (which jealously guard their right to license and tax sports betting) have sent Kalshi cease-and-desist letters, claiming its sports event contracts are essentially unlicensed sports gambling. Kalshi has pushed back, insisting that as a federally-regulated exchange it answers only to federal law, not state gaming boards.[8] This tug-of-war – financial regulator vs. gambling regulator – highlights the regulatory schizophrenia that prediction markets can provoke. Elsewhere globally, many governments lean toward the gambling view. Singapore, Thailand, and Taiwan have all banned access to Polymarket in their jurisdictions, explicitly citing that it is an unauthorized gambling platform. In Europe, the UK and other countries typically require a gambling license for any bookmaking or betting activities, which likely encompasses prediction markets that involve real-money stakes on event outcomes. (Indeed, some UKbased prediction market sites effectively operate under sports betting licenses.) The result is that some platforms geo-block certain countries or refrain from offering politically sensitive markets depending on local law. A few jurisdictions have carved out tiny exceptions – for instance, academic “play-money” prediction markets or small-scale research projects have existed (the famous Iowa Electronic Markets in the US ran for years under a special exemption for academic purposes). But by and large, if real currency is being staked on an uncertain future event, regulators abroad tend to treat it as either a regulated financial commodity (if a legal framework exists) or a form of gambling (if it does not).

Philippine Law: Prediction Markets as Gambling under PAGCOR

In the Philippines, prediction markets squarely fall under our legal definition of “gaming” or gambling, and thus they land in the regulatory domain of PAGCOR (the Philippine Amusement and Gaming Corporation). Philippine law defines gambling very broadly. Under the Revised Penal Code and related laws, gambling is “[any] game or scheme the result of which depends wholly or chiefly upon chance or hazard; or wherein wagers consisting of money, articles of value or representative of value are made”.[9]

In other words, if you bet money (or anything of value) on an outcome that involves any degree of chance, it’s gambling by definition. The law doesn’t really distinguish whether the “game” is a hand of cards, a roulette wheel spin, or an unpredictable real-world event like an election or sports match – if you’re wagering on it, it’s considered gambling unless authorized by law.

Critically, Philippine statutes and issuances make it illegal to engage in gambling if it is not expressly licensed or authorized by the government. A 2017 executive order expanded the definition of illegal gambling to cover “any game scheme, whether skill or chance or both, where wagers of money or value are at stake” if it’s not approved by the proper regulator.[10]

In short, even if someone argued that predicting events involves skill or analysis, that won’t avoid the gambling classification – the presence of a wager on an uncertain outcome is enough to trigger the law. And since PAGCOR is the agency empowered to license and regulate gambling in the Philippines, any entity that wants to offer a real-money prediction market here would need PAGCOR’s blessing. (PAGCOR’s charter gives it a mandate to centralize and oversee all games of chance in the country.)

At the time of writing, PAGCOR has not authorized any prediction market platforms, and it would likely view them as a form of betting or specialty game requiring a license. In fact, PAGCOR has been expanding the categories of e-games and betting it regulates – from ecasino games to sports betting – but these still require the outcomes to be among those it has approved. Unless and until PAGCOR creates a specific license category for prediction markets (or designates them under an existing category), any operation of this sort targeting Philippine users would be unlicensed and illegal. Simply put, if you run a real-money prediction market in the Philippines without PAGCOR (or other legal) authorization, you are running an illegal gambling operation, with all the attendant criminal penalties.

Another key hurdle is that the Philippines lacks the alternative regulatory path that U.S. operators have used – namely treating event contracts as financial derivatives. Unlike the U.S., the Philippines currently has no active commodities or futures exchange market to speak of. Only recently has the Securities and Exchange Commission (SEC) started exploring a possible revival of a domestic futures market, working with the U.S. CFTC on developing a regulatory framework.[11]

Until such a framework exists, there’s no mechanism to recognize a binary event contract as a regulated financial instrument (as opposed to a bet). For instance, in the U.S., Kalshi can say “our election contract is a futures contract regulated by the SEC/CFTC.” Here, that’s not an option – we have no legal concept of an “event futures contract” under securities or commodities laws at present.

So a prediction market can’t try to register with the Philippine SEC as a trading exchange for event contracts (there’s no law that clearly permits that yet). Theoretically, prediction-marketlike product might someday fit within future sandbox or fintech rules. The SEC’s proposed digital-asset and fintech sandbox could, in theory, test non-monetary or tokenized prediction products that provide social forecasting data without involving gambling mechanics. This would, however, require explicit SEC consent and coordination with PAGCOR to avoid jurisdictional conflict. That really leaves PAGCOR and gambling law as the default governing regime.

Even civil law closes the door on prediction markets. Under Article 2018 of the Civil Code,[12] “no action can be maintained by the winner for the collection of what he has won in a game of chance.” This means that even if no criminal case is filed, the contracts themselves are void and legally unenforceable. A bettor who “wins” in a prediction market cannot compel payment in court, and the platform cannot legally collect “losses” from participants. Philippine law thus blocks these markets twice over—public law treats them as illegal gambling, while private law refuses to recognize any right or remedy arising from the wager.

Finally, it must be noted that betting on certain events is expressly forbidden by Philippine law, no matter the platform. Most importantly, the Omnibus Election Code flatly prohibits any person from “bet[ting] or wager[ing] upon the outcome of an election” or any related contingency.[13] Doing so is an election offense, punishable by law, and any money wagered on an election is ordered forfeited to the government.

This means that even if PAGCOR were inclined to license some forms of prediction market, wagers on Philippine election results are absolutely off-limits – they are illegal in and of themselves under election law. (This aligns with a public policy of preventing wagers that could incentivize tampering with election outcomes or otherwise undermine the integrity of the democratic process.)

In past elections, the COMELEC has even warned the public not to engage in office betting pools or informal election bets, citing this prohibition. So any prediction market that offered action on “who will be the next President/Governor/etc.” would be violating Philippine law outright. This is an important distinction because election markets are among the most popular prediction markets globally – yet they are completely illegal to conduct in the Philippine context.

Can Prediction Markets Avoid the “Gambling” Label?

Given the stringent definition of gambling in the Philippines, is there any way a prediction market could operate here without being deemed gambling? In theory, to not meet the legal definition of gambling, you’d have to eliminate one of the key elements of gambling: typically (1) consideration (the wager or stake), (2) chance, or (3) prize/reward. It’s essentially the “no purchase necessary” logic that sometimes separates a legal promo contest from an illegal lottery. Let’s apply that test:

  • No Consideration (No Money at Stake): The clearest way to not be gambling is if participants don’t put up anything of value. If a prediction market were run with play money, points, or purely for bragging rights with no monetary reward, then there’s no wager of money or object of value involved. Without real “wagers consisting of money [or] articles of value”, it likely wouldn’t meet the Revised Penal Code’s definition of gambling. Indeed, we already have some free “prediction games” (for example, social media polls or trivia apps) that aren’t considered gambling because no one bets anything of value and any prizes are non-monetary or predetermined. A prediction market could conceivably operate on virtual tokens with no real-world value or on a purely play-for-fun basis and thereby avoid gambling classification. The downside? It would also lose the very incentive that makes it effective – people “bet with their heads” when real money is on the line, whereas play-money markets may not generate the same accuracy or participation. In short, a no-stakes prediction market is legal, but it’s essentially just an academic exercise.
  • No Chance Element (Pure Skill or Certainty): Another theoretical escape from gambling laws is if the outcome isn’t contingent on chance at all. However, by their nature, prediction markets deal with uncertain future events – chance (or at least uncertainty outside the bettor’s control) is inherent. Even if one argues that skill and knowledge play a role in making good predictions, the actual occurrence of the event isn’t under any participant’s control, and thus chance is always a factor. Philippine law explicitly says even if skill is involved, a wagering scheme is still considered gambling if it’s not authorized. So this path is basically closed. Unless one were “predicting” something pre-determined (which would be fraud, not a prediction market), you can’t remove the chance element from genuine event predictions.
  • No Prize/Payout: If people place bets but nobody wins or loses anything of value based on the outcome, then you might not have gambling – but this scenario is a bit nonsensical. A market requires a payoff to motivate trading; without any prize or return, it’s not really a market at all. This is essentially the same as having no consideration/stake. If perhaps a website allowed people to state predictions and tracked their accuracy for reputation points (with no money changing hands), that’s not gambling – but it’s also not a real-money market.

Some legal commentators have argued that the structure of the platform could be tweaked to distance it from traditional gambling. For instance, if the platform does not “take a house position” and merely facilitates trades, it functions more like a neutral broker or exchange.[14]. In markets like the U.S., this distinction has regulatory significance – a neutral exchange can be regulated by the CFTC and exempted from gambling laws, whereas a bookmaker (who takes one side of every bet) squarely falls under gambling regulation. However, in the Philippines, this nuance currently has no foothold in law. Whether you’re a neutral matching platform or a traditional bookmaker, if people are betting on uncertain outcomes on your platform, you are facilitating gambling unless you have a license. The nature of the odds-maker (house vs. peerto-peer exchange) is not addressed in our gambling statutes.

The Philippines could also, in theory, allow a university or think-tank-run forecasting exchange purely for academic purposes, where participants use small play-money stakes or capped micro-amounts. This would align with the public-policy exceptions under Article 2018–2021 of the Civil Code, which void gambling contracts but permit certain games “for amusement or recreation.” To be safe, this model would likely require coordination with PAGCOR or the SEC to confirm it’s not a regulated gaming activity.

In summary, under current Philippine law, a real-money prediction market involving actual payouts will almost certainly be treated as a form of gambling. It would need a license from PAGCOR and would be subject to all gambling restrictions (including the absolute ban on election betting). A prediction market could avoid illegality only by removing real stakes – essentially running as a free contest or a play-money platform – but at the cost of losing its practical utility and appeal.

Final Thoughts

The excitement around prediction markets – their eye-popping growth and their potential to harness collective intelligence – is understandable. Globally, they are forcing regulators to rethink old categories: is a bet on GDP numbers or on an election outcome fundamentally different from a bet on a roulette wheel? Different countries answer that question differently.

In the Philippines, for now, the answer is clear: if you’re betting on uncertain events for profit, you’re engaged in gambling. Our laws and regulators treat it as such, and none of the current regulatory frameworks (financial or gaming) provide a carve-out for open prediction markets. PAGCOR views itself as the gatekeeper for any gaming activity, and without its approval, prediction markets are just as illegal as any unlicensed online casino or bookie operation.

Could this change in the future? Possibly. If the SEC succeeds in establishing a commodities or futures market domestically, there might eventually be room to classify certain event contracts as financial instruments rather than bets – but that would likely require new legislation or regulations. PAGCOR, for its part, could consider innovative licensing if it saw a way to tax and supervise prediction markets safely. And regardless, bets on Philippine elections will remain off-limits by law.

For the time being, anyone asking “can I legally run or participate in a prediction market in the Philippines?” should know that the safe answer is “No, not for real money”. Prediction markets may be a fascinating new tool for forecasting and investment abroad, but here they squarely hit the regulatory wall of gambling law – a reminder that in the Philippines, not all bets on the future are ones you’re legally allowed to make.

Citations

[1] DL News. (2025, October 18). Prediction markets hit record trading volumes. DL News. https://www.dlnews.com/articles/markets/prediction-markets-hit-record-trading-volumes/

[2] Financial Times. (2025, October 14). ICE to invest $2 billion in Polymarket, valuing the prediction-market platform at $8 billion. Financial Times. https://www.ft.com/content/9437b5b5-59c0-44a3-8b25-58b3b4aa1b0c

[3] Decrypt. (2025, October 15). Prediction markets reach all-time-high trading volume as mainstream interest grows. Decrypt.

[4] Sigalos, M. (2025, January 24). Polymarket says its prediction platform is not gambling, as regulators revisit event contracts. CoinDesk. https://www.coindesk.com/policy/2025/01/24/polymarket-prediction-market-notgambling.

[5] Rovell, D. (2025, October 12). How Kalshi and prediction markets are disrupting sports betting. ESPN. https://www.espn.co.uk/espn/betting/story/_/id/45377686/kalshi-predictionmarkets-disrupt-sports-betting

[6] KPMG U.S. (2025, September). The current state of prediction markets. KPMG. https://kpmg.com/us/en/articles/2025/current-state-of-prediction-markets.html

[7] Department of Finance (Philippines). (2025, August 21). Recto: New SEC chair to fast-track reforms to improve ease of doing business and deepen capital market. DOF. https://www.dof.gov.ph/recto-new-sec-chair-to-fast-track-reforms-to-improve-ease-ofdoing-business-and-deepen-capital-market/

[8] Rovell, D. (2025, October 12). How Kalshi and prediction markets are disrupting sports betting. ESPN. https://www.espn.co.uk/espn/betting/story/_/id/45377686/kalshiprediction-markets-disrupt-sports-betting.

[9] Revised Penal Code (Act No. 3815), Article 195 (as amended).

[10] Executive Order No. 13. (2017). Strengthening the fight against illegal gambling and clarifying the jurisdiction of concerned agencies.

[11] Department of Finance (Philippines). (2025, August 21). Recto: New SEC chair to fast-track reforms to improve ease of doing business and deepen capital market. DOF. https://www.dof.gov.ph/recto-new-sec-chair-to-fast-track-reforms-to-improve-ease-ofdoing-business-and-deepen-capital-market/.

[12] Civil Code of the Philippines. (1950). Article 2018. https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html

[13] Batas Pambansa Blg. 881. (1985). Omnibus Election Code of the Philippines. § 261(c). https://lawphil.net/statutes/bataspam/bp1985/bp_881_1985.html.

[14] Sigalos, M. (2025, January 24). Polymarket says its prediction platform is not gambling, as regulators revisit event contracts. CoinDesk. https://www.coindesk.com/policy/2025/01/24/polymarket-prediction-market-notgambling.