The Gibraltar government has officially introduced a regulatory framework for prediction markets after months of preparation and the issuance of two licenses. Published in the Gibraltar Gazette, these regulations are part of the new Gibraltar Gambling Act 2025, overseen by the Ministry for Justice, Trade and Industry, led by Minister Nigel Feetham.
This new framework adopts an "activity-based and risk-based approach" to regulation, taking into account various risks such as market integrity, protection of participants, prevention of financial crime, and the preservation of Gibraltar’s reputation. An official government note highlighted the framework's recognition of the importance of prediction markets in aggregating information and aiding in price discovery.
In an interview, Minister Feetham stated, "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 reported considerable interest from prospective applicants, including some well-known companies.
To facilitate the implementation of this framework, an independent supervisory panel has been established. This body possesses experience in overseeing remote, technology-driven markets, according to Feetham.
The drive toward regulating prediction markets was first hinted at by Feetham during a parliamentary session in April, during which he revealed that an initial license had been granted to ADI Predictstreet. However, that license fell under older legislation as the new Gambling Act had not yet been fully enacted.
The detailed 24-page regulatory document specifies several requirements for prediction market operators. All event contracts must receive approval and certification from the Gambling Authority. These contracts must be "clear, capable of objective settlement, not readily susceptible to manipulation and consistent with the regulatory objectives." Operators are responsible for maintaining their own systems to prevent market manipulation, insider trading, or misuse of confidential information. The authority reserves the right to restrict certain contracts deemed inappropriate or against public interest, including those related to criminal activities, death, serious injury, terrorism, or armed conflict.
The initial license issued to ADI operates under a "betting intermediary" license; however, the newly established legislation categorizes prediction market activities distinctly, complete with its own authorization and supervision requirements. Feetham noted that this move reflects Gibraltar’s swift adaptation, particularly after the UK introduced gambling tax increases, which had posed challenges to the region's gaming sector predominantly serving the UK market.
Feetham declared, "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." Following this, WagerWire, a US betting marketplace, is poised to become the second license holder in Gibraltar after receiving approval to launch in June. Co-founder Travis Geiger expressed that his platform aims to debut a B2B and B2C prediction market product in time for the NFL preseason and the start of international football in August.
Geiger praised Gibraltar's reputation in the gaming space, asserting that he believes the framework will serve as a model for 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, similar to their gaming license."
Feetham acknowledged the current ambiguity surrounding the classification of prediction markets, noting that financial and gambling regulators in the US have been conflicted over whether they should be treated as gambling or financial activities. He explained, "Internationally, there remains no settled consensus as to how prediction markets should be characterized. Different jurisdictions may view them differently. Gibraltar’s framework therefore provides an additional regulatory option by establishing a dedicated regime."
He further emphasized the rapid evolution of the prediction market sector, stating, "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."
Last week, the EU financial regulator ESMA reaffirmed its position on specific prediction market contracts under its jurisdiction, while several gambling regulators across Europe have blocked operators like Polymarket and Kalshi from operating within their borders. In June, a cross-market coalition formed against the prediction market's rising prominence, involving gambling regulators from Belgium, France, Germany, Italy, the Netherlands, Poland, Portugal, and Spain. This group raised concerns regarding consumer risk due to inadequate safeguards for players, including the absence of mandatory betting limits or cooling-off periods.
Despite these challenges, Feetham pointed out that Gibraltar's framework has proactively implemented safeguards that align with the unique characteristics of exchange-based markets, including measures for preventing market manipulation, managing conflicts of interest, protecting participants, ensuring governance, safeguarding client assets, complying with anti-money laundering laws, and planning for financial resources and wind-down scenarios.
