In April 2026, the Investor and Financial Education Council (IFEC), a statutory body established under the Securities and Futures Commission (SFC), published a formal warning that trading on prediction markets may constitute illegal gambling under the Gambling Ordinance (Cap. 148, Laws of Hong Kong). The warning was issued as Hong Kong residents increased participation on platforms including Polymarket and Kalshi, and coincided with the government's decision to halt its proposal for regulated basketball betting.
Under section 8 of the Gambling Ordinance (Cap. 148), betting with a bookmaker is a criminal offence. The IFEC's position is that prediction market contracts, which pay out based on the outcome of future events, fall within the definition of a bet placed with an operator acting as bookmaker. The IFEC also noted that participants in prediction markets fall outside the Securities and Futures Ordinance (Cap. 571) and any regulatory regime administered by the SFC, meaning statutory investor protection does not apply to losses on these platforms.
Hong Kong residents trading on offshore prediction market platforms face potential criminal liability under Cap. 148 for each wager placed. Operators targeting Hong Kong users face prosecution risk for unlicensed bookmaking, which carries significant criminal penalties under the Ordinance. Institutional participants using prediction markets for hedging or event-driven research should obtain legal advice before continuing, given the IFEC's stated position. Locally incorporated entities offering access to, settlement for, or marketing of prediction market platforms to Hong Kong users may face regulatory scrutiny.
The IFEC warning is not a formal prosecution policy and does not draw a statutory bright line between prediction markets and lawful financial instruments. Open questions remain on whether play-money or non-monetary prediction markets fall within Cap. 148's prohibition, and on the extraterritorial reach of Cap. 148 to offshore operators with no Hong Kong presence. The HK government's policy position may shift if it revisits expanded sports betting legislation following the April 2026 suspension.
Licentium advises prediction market operators, fintech platforms, and digital asset businesses on regulatory risk in Hong Kong, Singapore, the UAE, and other Asia-Pacific jurisdictions. We maintain a partner network of gaming law specialists and local counsel in Hong Kong for regulatory opinion, licensing analysis, and Cap. 148 compliance review. To discuss the applicability of the Gambling Ordinance to your platform or product, contact us. Work we undertake includes regulatory risk assessment for prediction market operators, gambling licensing advice, Cap. 148 exposure analysis, and iGaming and digital asset cross-border regulatory strategy.