Prediction Markets in Chile: What They Are and What Risks Users Face

What are prediction markets

Prediction markets are platforms where users buy and sell contracts whose value depends on whether a future event occurs. Events can be climate-related, sports, political, or economic. Unlike traditional sports betting, these contracts trade like financial assets and their price reflects the probability the market assigns to the event.

Platforms like Kalshi and Polymarket have gained global traction. According to a report by iGaming Business published on August 28, 2026, Kalshi listed more than 8,000 active markets and recorded a trading volume of $27 billion during the 2026 World Cup. The U.S. Commodity Futures Trading Commission (CFTC) oversees Kalshi as a registered exchange, but that authority does not extend to operations conducted from Chile.

Example: weather hedging

A case reported by iGaming Business illustrates practical use. The Los Angeles ice cream shop 28 Wishes noticed that sales drop about 20% when the temperature falls below 21°C. Since April, its owners have invested about $20 per day in Kalshi weather contracts. They report profits of up to $1,500 per month, which partially offset the loss of revenue.

However, the hedge is imperfect. The contract settles based on the temperature recorded at a specific weather station, not at the store. If it is cold at the station but the shop is busy, the contract pays even though there is no real loss. Conversely, if the station records warm temperatures but the store is empty, the contract does not pay. This mismatch is called basis risk. To reduce it, a business must choose a station, threshold, and period that closely match its commercial conditions.

Risks for consumers

For a Chilean user accessing these markets from a computer or phone, the risks are several:

No local regulation: no Chilean authority – SCJ, SERNAC, CMF – supervises these platforms. If there is a problem with fund withdrawal or contract settlement, the user has no recourse within the country.

Settlement risk: in April 2026, abrupt temperature jumps at Paris Charles de Gaulle Airport settled profitable Polymarket positions. Météo-France filed a police complaint alleging possible interference with an automated data processing system. For a business using these contracts as hedges, the settlement source, corrections, backup data, and dispute procedures are crucial.

Leverage and locked capital: contracts require collateral for the maximum possible loss. A market maker buying 100 million “No” contracts at 99 cents must commit $99 million until settlement. For a retail user, even small positions can be locked for weeks.

No deposit insurance: no guarantee fund protects money deposited on these platforms. If the company goes bankrupt or is hacked, the user can lose everything.

Regulation and oversight in Chile

In Chile, prediction markets are not covered by the Casino Law (20.033) nor by the online betting bill (boletín 14838-03). The Superintendencia de Casinos de Juego (SCJ) only regulates physical casinos and authorized sports betting. Any foreign platform accepting Chilean users operates without a local license, just like offshore betting sites.

The Comisión para el Mercado Financiero (CMF) also has no authority over these instruments unless they are structured as securities. For now, no Chilean entity has issued a specific warning about prediction markets, but the risk is the same as for any unregulated betting site: the user assumes all responsibility.

Key data

ElementDetailMain platformsKalshi (CFTC-regulated in the U.S.), Polymarket (unregulated in Chile)Reported volume$27 billion on Kalshi during the 2026 World CupMain risk for ChileansLack of legal protection and local oversightHedging example28 Wishes ice cream shop uses weather contracts for $20/day

What Chilean users should check

If a Chilean user considers using prediction markets, they should verify at least three points before depositing:

The platform provides clear terms on settlement, corrections, and disputes.
The contract has an objective settlement source resistant to manipulation.
Withdrawal methods work for Chile and do not impose excessive delays.

None of these conditions are guaranteed by a Chilean authority. The reader must assume they operate at their own risk, without support from SERNAC or the SCJ.

Fuente: iGaming Business, “Hedging risk via prediction market contracts”, 28 de agosto de 2026. https://igamingbusiness.com/prediction-markets/hedging-risk-via-prediction-market-contracts/

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