TLDR
- Kalshi launches its first international expansion by partnering with XP International in Brazil
- XP Group oversees $345 billion+ in assets with a customer base of 4.7 million
- Access limited to XP Clear brokerage clients holding international investment accounts
- Launch focuses primarily on economic and financial event markets
- Brazil’s gaming oversight body IBJR questions legality, suggesting products may violate betting regulations
In its first venture beyond American borders, XP International has joined forces with Kalshi, the regulated U.S. prediction market operator, to bring event-based trading to Brazilian investors.
As Brazil’s financial powerhouse, XP Group commands more than $345 billion in managed assets while serving a clientele exceeding 4.7 million. This collaboration positions XP as the pioneer in delivering regulated prediction market services beyond United States territory.
Access to these markets will be channeled through Clear, the brokerage division of XP. Participation is restricted exclusively to those maintaining international investment portfolios.
Kalshi has indicated its initial approach centers on economic and financial outcomes. The platform maintains these offerings could “increase pricing efficiency and improve market information quality.”
Luana Lopes Lara, who co-founded Kalshi and serves as COO, expressed enthusiasm about the partnership. “As a Brazilian, I couldn’t be more excited for XP to be Kalshi’s first brokerage partner outside the U.S.,” she stated.
XP emphasized its commitment to offering these markets “with diligence, aligned with client profiles and regulatory requirements,” while highlighting its dedication to financial literacy and proper governance.
Regulatory Uncertainty in Brazil
Brazil’s regulatory framework for these products remains in flux. Earlier this year in February, the nation’s securities watchdog, the CVM, granted approval for the country’s inaugural prediction market as a recognized financial instrument.
Yet consensus on proper regulatory jurisdiction remains elusive. Industry observers suggest oversight responsibility could ultimately reside with the CVM, Brazil’s Central Bank, or the Finance Ministry.
The Brazilian Institute of Responsible Gaming (IBJR) has voiced opposition to the initiative. The organization contends that prediction markets dependent on uncertain events constitute gambling activities, irrespective of their presentation.
“Presenting these models as innovation only masks the legal risk, without changing the economic exposure,” the IBJR declared in its official response.
The IBJR referenced global examples to support its position. It highlighted that UK authorities classify comparable products as wagering. Meanwhile in America, it observed increasing regulatory scrutiny and enforcement action surrounding these offerings.
What This Means for Investors
Specific product offerings and the complete range of available markets remain undisclosed at present. Kalshi and XP indicated that comprehensive details will emerge in accordance with applicable regulations.
The IBJR cautioned that permitting these products to function outside established betting frameworks risks “unfair competition, weakening of consumer protection, threat to sports integrity and loss of tax revenue.”
Given Brazil’s recent implementation of fixed-odds betting legislation, the IBJR contends that circumventing these established parameters cannot be legitimately framed as innovation.
This partnership represents Kalshi’s inaugural international expansion, with Brazil selected as the debut market for global operations.
