A federal jurisdictional battle in Washington is quietly reshaping the regulatory calculus for one of Asia’s most ambitious financial hubs.
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I. The Battle Lines in Washington
When the Commodity Futures Trading Commission filed an amicus brief in federal court in February 2026 to defend its “exclusive jurisdiction” over prediction markets, it did more than intervene in a legal dispute between platforms like Kalshi and Crypto.com and state gambling authorities. It fired a shot that will reverberate across every jurisdiction that has tried to draw its own line between financial innovation and unregulated wagering — and few jurisdictions have staked out a clearer, more consequential position than Singapore.
Senator Elizabeth Warren’s blunt characterisation of the move as helping “corrupt political insiders cash in” may be pitched at domestic political audiences, but it captures a genuine tension that regulators in Singapore are quietly watching: at what point does a “derivative” cease to be a financial instrument and become, functionally, a bet? And who gets to decide?
The stakes of that question are substantial. CFTC Chairman Michael Selig, appointed under the Trump administration, has been explicit that the agency views prediction markets as derivatives — “plain and simple” — that have operated within the CFTC’s regulatory perimeter for over two decades. His agency has withdrawn a previously proposed ban on political and sports-related event contracts and directed staff to draft new rules providing “clear standards.” For Selig, the logic is straightforward: prediction markets aggregate dispersed information, facilitate price discovery, and allow commercial actors to hedge risks — functions that are definitionally those of a regulated derivatives exchange, not a casino.
Warren and her Democratic colleagues read the same facts differently. The ability to trade a contract on whether a specific politician wins an election, or whether a military operation succeeds, is not, in their view, meaningfully distinguishable from sports betting — and it carries the additional risk of creating financial incentives for those with access to non-public information to profit at the expense of the public.
Both sides are right about something. That is precisely what makes Singapore’s position so analytically interesting.
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II. Singapore’s Settled — and Precarious — Position
Singapore has not been ambivalent. In January 2025, the Gambling Regulatory Authority (GRA) directed local Internet Service Providers to block access to Polymarket, classifying the platform as an unlicensed online gambling operator under the Gambling Control Act. The enforcement action coincided with a broader transfer of online gambling oversight from the GRA to the Singapore Police Force, effective 1 January 2025, signalling an intensification rather than relaxation of enforcement posture. Under the Act, users of unlicensed gambling platforms face fines of up to S$10,000 and imprisonment of up to six months.
For operators, Singapore is now formally a restricted jurisdiction. Polymarket currently geofences approximately 33 jurisdictions worldwide — Singapore sits alongside France, the United Kingdom, Germany, Australia, and the United States on that list. The message is unambiguous: prediction markets, as currently constituted, are not welcome.
This is, in isolation, consistent with Singapore’s historically cautious approach to gambling regulation. Singapore Pools remains the only licensed online gambling operator in the city-state. The country’s regulatory architecture for gaming is designed to tightly circumscribe access, both to manage social harm and to prevent the city-state from becoming a conduit for money laundering — a concern that has sharpened considerably in the wake of a multi-billion-dollar money laundering scandal tied to gaming operations in Southeast Asia that broke in 2023.
The conceptual coherence of Singapore’s position, however, is being stress-tested by what is unfolding in Washington. If the CFTC successfully asserts exclusive federal jurisdiction over prediction markets — and early federal court rulings have been favourable to platforms like Kalshi, which defeated a New Jersey cease-and-desist in May 2025 — the international regulatory landscape will bifurcate in a way that creates direct pressure on Singapore’s policy framework.
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III. The Structural Tension: Derivatives Hub vs. Gambling Regulator
Singapore’s ambition to be Asia’s premier derivatives trading hub is not merely aspirational rhetoric. The Monetary Authority of Singapore (MAS) has invested substantially in building out the infrastructure. SGX reported a 17% increase in derivatives volume in FY 2025. MAS’s own capital markets division, in a December 2025 address at the Futures Industry Association Asia Derivatives Conference, articulated the agency’s commitment to “promote markets that serve companies and consumers with Fairness, Integrity and Transparency” — language that explicitly positions Singapore as a serious venue for sophisticated financial instruments.
At the same time, Singapore’s Securities and Futures Act (SFA) already provides a regulatory pathway for derivatives. Firms offering investment or trading platforms require a Capital Markets Services (CMS) licence. Cryptocurrency derivatives, for instance, are regulated under the SFA. The SGX and CME Group both offer regulated Bitcoin futures contracts. These products involve contracts whose payoff depends on the price of an underlying asset — structurally, they are not categorically different from a contract whose payoff depends on a specified event, occurrence, or outcome.
This is the nub of the problem. Singapore’s regulatory framework already accommodates event-linked financial contracts in some forms. Weather derivatives, catastrophe bonds, and certain commodity futures are all contracts that settle based on events occurring in the world rather than purely on asset price movements. The GRA’s classification of Polymarket as a gambling operator rather than MAS’s classification of it as a derivatives platform is, therefore, a policy choice — not an inescapable legal conclusion.
The GRA and MAS inhabit different regulatory universes within the Singapore government. The GRA’s mandate is harm prevention; it sees prediction markets through the lens of problem gambling, money laundering risk, and the social costs of normalising wagering on political and geopolitical outcomes. MAS’s mandate is financial system development; it sees derivatives through the lens of capital efficiency, risk transfer, and price discovery. These mandates have not yet been forced into direct confrontation on the specific question of prediction markets — but the US regulatory evolution makes that confrontation increasingly likely.
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IV. The Insider Trading and National Security Dimension
Senator Cortez Masto’s invocation of the Maduro capture in Warren’s statement points to the sharpest edge of this debate, and one that is particularly salient for Singapore. The concern is that participants with access to non-public government information — intelligence operatives, diplomatic officials, military personnel — could use prediction market positions to profit from foreknowledge of operations or policy decisions.
This is not a hypothetical concern, and it is not geographically contained to the United States. Singapore, as a major financial centre with substantial government-linked investment activity and deep connectivity into both Western and Asian intelligence ecosystems, faces a version of this risk acutely. The existing framework for insider dealing under Singapore’s SFA prohibits trading on material non-public information in connection with securities — but only securities. Event contracts, if classified as gambling rather than derivatives, fall outside the SFA entirely, removing the legal architecture that would otherwise catch this conduct.
This creates a perverse regulatory outcome: if prediction markets were regulated as derivatives under the SFA, Singapore would have a robust legal toolkit to prosecute insider trading in those contracts. By classifying them as unlicensed gambling and blocking access to them, Singapore removes both the activity and the enforcement mechanism. Users who access prediction markets through VPNs — and the evidence from Singapore user communities suggests they do — participate in markets that no Singapore enforcement authority has jurisdiction over, in transactions that generate no AML or KYC trail.
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V. The Competitive Dimension: Innovation at the Frontier
There is also a straightforward competitive question that Singapore must answer. Global trading volume on prediction markets surpassed $28 billion from January to October 2025. In January 2026 alone, aggregated volume reached approximately $10.5 billion. Institutional participation is accelerating: a 2025 EY-Coinbase survey found that 61% of institutional investors interested in tokenised assets expected to begin investing by 2026. CNN signed an exclusive partnership with Kalshi in December 2025 to integrate live prediction market odds into its news coverage. These are not the characteristics of a niche instrument heading for regulatory extinction; they are the characteristics of an emerging asset class achieving mainstream legitimacy.
The CFTC’s aggressive assertion of federal jurisdiction is designed, in part, to provide the regulatory clarity that institutional capital requires before committing at scale. Chairman Selig’s remarks at the Project Crypto summit in January 2026 were explicit: the existing framework has “failed market participants,” and the agency intends to establish clear standards. The platforms that can demonstrate compliance-by-design — robust KYC, AML controls, market integrity surveillance, and coherent oracle mechanisms for contract resolution — will be positioned to attract institutional liquidity.
Singapore, as a jurisdiction that has built its financial sector reputation precisely on compliance-by-design, is exceptionally well-positioned to host regulated prediction market activity — if it chose to. MAS’s regulatory sandbox, which allocated $300 million to support testing of new fintech models in 2025, exists precisely for this kind of instrument: innovative enough to be uncertain in its regulatory classification, mature enough in its mechanics to be analysable under existing frameworks. The sandbox pathway would allow a prediction market operator to test whether, under Singapore’s SFA framework with appropriate CMS licensing and conduct-of-business rules, event contracts could be offered in a manner that satisfies both MAS’s market integrity requirements and the GRA’s harm prevention concerns.
No such sandbox application has been publicly announced. The GRA’s blocking order has, in effect, pre-empted the conversation.
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VI. The Asymmetry of Regulatory Risk
It would be naive to suggest Singapore should simply replicate the US model. The US federal system creates a specific jurisdictional dynamic — where the CFTC’s preemption argument is grounded in decades of Commodity Exchange Act jurisprudence — that does not translate directly to Singapore’s unitary regulatory structure. Singapore does not have a fragmented state-federal patchwork to overcome; it has a single, coherent regulatory regime that could, in principle, accommodate prediction markets within existing frameworks more cleanly than the US has managed.
The more pertinent risk for Singapore is asymmetry. If the CFTC’s jurisdictional claim is sustained and the US becomes the dominant regulated venue for prediction market activity — particularly institutional activity — Singapore’s blanket blocking posture will have ceded a significant market segment to New York without any compensating social harm reduction benefit. Sophisticated participants will access the markets through regulated US-licensed channels or through offshore platforms; Singapore will have neither the tax revenue, the price discovery benefit, nor the regulatory oversight.
This is not an unfamiliar dynamic. Singapore navigated analogous questions around cryptocurrency derivatives, initially cautious before establishing the SFA framework that now accommodates regulated crypto futures. The intellectual and institutional infrastructure to do the same for event contracts exists. The policy will — and the inter-agency coordination between MAS and GRA that would be required — is what remains to be demonstrated.
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VII. What Should Singapore Do?
The Warren-Selig confrontation in Washington is ultimately a proxy for a deeper question about the nature of information-based financial instruments: whether the mechanism of a market — price discovery, risk transfer, continuous bilateral trading — is sufficient to transform what might otherwise be a bet into a derivative. Singapore’s regulators have, implicitly, said no. The CFTC, under its current leadership, has said yes.
A more sophisticated resolution — and one that would be consistent with Singapore’s tradition of principled regulatory innovation — would disaggregate the question. Not all prediction markets are equivalent. A market on whether the US Federal Reserve will raise rates by 25 basis points at its next meeting is functionally a derivatives product; traders, including central banks and large financial institutions, already price this probability into sovereign bond markets. A market on whether a specific head of state will be in office in six months is something different: it creates financial incentives around political outcomes in ways that carry externalities beyond the purely financial.
Singapore could construct a taxonomy that mirrors this distinction. Event contracts tied to macroeconomic data, commodity prices, weather outcomes, and corporate events could be accommodated under the SFA with appropriate CMS licensing and conduct requirements — bringing them within the AML and market manipulation frameworks that currently apply to regulated derivatives. Event contracts tied to electoral outcomes, judicial decisions, and national security-sensitive events could remain outside the regulatory perimeter, consistent with the GRA’s harm prevention mandate.
This would require MAS and GRA to work from a shared analytical framework rather than from their respective institutional defaults. It would require the government to make a considered policy choice about which prediction market use cases are consistent with Singapore’s position as a serious financial centre and which are not. And it would require Singapore to engage proactively with the CFTC and other G20 derivatives regulators to develop interoperability standards, so that Singapore-regulated event contracts can be recognised and traded alongside their US counterparts without jurisdictional friction.
None of this is simple. But the alternative — maintaining a blanket blocking posture while the rest of the world develops a functioning regulated market — is a form of regulatory complacency that sits uneasily with Singapore’s ambitions.
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Conclusion: The Bet Singapore Has Already Made
By blocking Polymarket and declining, so far, to develop a regulatory framework for prediction markets, Singapore has effectively placed a bet of its own: that this instrument class will remain peripheral enough to the global financial system that the opportunity cost of exclusion is manageable, and that the social harm risks are significant enough that exclusion is justified.
The CFTC’s actions in early 2026 suggest that bet is aging poorly. The question is not whether prediction markets will achieve regulatory legitimacy somewhere — they already have, in the most important derivatives jurisdiction in the world. The question is whether Singapore will be present when they do, shaping the standards and capturing the institutional activity that flows from regulatory clarity, or whether it will watch that activity consolidate elsewhere and revisit the question, once again, after the market has already moved.
Singapore has historically been good at not waiting that long. The Warren-Selig battle is, unexpectedly, the moment that tests whether that remains true.
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