Gibraltar unveils dedicated prediction markets regulation

After months of preparations, and with two licences already granted, the Gibraltar government has today unveiled a formal framework to support its entry into the predictions markets vertical.

Regulations were published in the Gibraltar Gazette on Monday by the Ministry for Justice, Trade and Industry, led by minister Nigel Feetham. They form part of the new Gibraltar Gambling Act 2025.

The framework seeks to adopt an “activity-based and risk-based approach” to regulating prediction markets, according to the risks they present, including market integrity, participant protection, financial crime prevention, protection of Gibraltar’s reputation, governance, operational resilience and objective settlement.

A government note also said the framework recognised the role that such markets can play in aggregating information and facilitating price discovery.

Speaking to iGB the minister said: “This framework is the product of extensive engagement with industry professionals, prospective operators and investors over recent months. It reflects Gibraltar’s collaborative approach to regulation and demonstrates that innovation and robust regulatory standards can go hand in hand.”

He also said the regulator and ministry had received significant interest from a number of prospective applicants, including some globally recognised businesses.

An independent supervisory panel has been established to oversee the framework’s implementation in Gibraltar. The authority has experience in overseeing remote, technology-enabled markets and in regulating complex digital environments, Feetham said.

A move into the vertical was first hinted at by Feetham in April during a parliamentary session. He said at the time that an initial licence had been awarded to ADI Predictstreet, but as the peninsula’s new Gambling Act had not yet been fully brought into force, the licence fell under the previous legislation.

What does the framework include?

The 24-page regulatory document outlined a number of notable rules for prediction market operators to adhere to, including all event contracts being approved and certified by the Gambling Authority.

All event contracts must also be “clear, capable of objective settlement, not readily susceptible to manipulation and consistent with the regulatory objectives”.

Operators must ensure they have their own systems in place to prevent market manipulation, insider dealing or misuse of confidential information.

The authority will maintain the discretion to restrict or prohibit certain prediction market contracts if it considers them inappropriate or contrary to the public interest. These include any contracts relating to criminal conduct, death, serious injury or terrorism, or the occurrence of war or armed conflict.

Gibraltar’s first prediction market licensees

ADI’s licence fell under a “betting intermediary” licence, but the new legislation establishes prediction market activity as a distinct statutory category with its own authorisation, operational requirements and supervisory framework. 

Feetham at the time said that the move marked Gibraltar’s ability to quickly adapt, particularly after gambling tax hikes in the UK threatened the peninsular’s significant gaming sector, which primarily serves the UK market.

“Today, we have delivered on that commitment with the publication of a bespoke regulatory regime for prediction markets, the first dedicated framework of its kind anywhere in the world,” he said this week.

US betting marketplace WagerWire is on track to become the second licence holder in Gibraltar, after receiving approval to launch in June.

Speaking to iGB, WagerWire co-founder Travis Geiger said the California-based platform was aiming to launch a B2B and B2C prediction markets product by the NFL preseason, and the start of international football in August.

Geiger talked up Gibraltar’s reputation as a gaming powerhouse, adding that he believed the framework would be used as a model in other jurisdictions.

“I think this is the beginning of the end of the wild west and the taming of the frontier,” he said. “What Gibraltar has done is they said, ‘we’re the first to roll out the new rules of the road’ and they have a history of being the gold standard. I believe that their framework will be adopted by countries that either have or don’t have their own gaming authority in a similar way that their gaming licence has been adopted.”

Ahead of the curve

In his note announcing the launch of the regulatory framework, Feetham acknowledged the lack of “settled consensus” on how prediction markets should be characterised.

Financial and gambling regulators in the US have for some time been battling it out over whether the vertical, which has gained huge popularity on the back of leading operators Kalshi and Polymarket, should be regulated as either a gambling or financial activity.

“Internationally, there remains no settled consensus as to how prediction markets should be characterised. Different jurisdictions may view them differently. Gibraltar’s framework therefore provides an additional regulatory option by establishing a dedicated regime,” Feetham said.

“The prediction market sector is evolving rapidly. These regulations provide a clear, adaptable and robust framework capable of supporting responsible innovation while maintaining high standards of market integrity, participant protection and regulatory oversight.”

EU financial regulator ESMA last week reaffirmed its position on specific prediction market contracts which fall under its jurisdiction, including those with binary yes-or-no outcomes and fixed payouts.

Other gambling regulators across Europe have taken a similar stance to the US having blocked prominent operators like Polymarket and Kalshi from operating in their jurisdictions.

A cross-market coordination against the vertical’s rise in Europe was initiated in June. The actions featured gambling regulators from Belgium, France, Germany, Italy, the Netherlands, Poland, Portugal and Spain.

The consortium flagged concerns over consumer risks due to a lack of safeguarding for players, including no mandatory betting limits or cooling-off periods. 

Feetham, however, said Gibraltar’s framework has sought to implement certain safeguards which reflect the operational characteristics of exchange-based markets, including measures relating to market manipulation, conflicts of interest, participant protection, governance, safeguarding of client assets, anti-money laundering and sanctions compliance, together with financial resources and wind-down planning.