The Gibraltar government has officially launched a new regulatory framework aimed at supporting its entry into the prediction markets sector, following several months of preparation and the granting of two licenses. Regulations were published in the Gibraltar Gazette on Monday by the Ministry for Justice, Trade and Industry, overseen by Minister Nigel Feetham, as part of the upcoming Gibraltar Gambling Act 2025.
This framework adopts an "activity-based and risk-based approach" to regulating prediction markets, focusing on crucial aspects such as market integrity, ensuring participant protection, preventing financial crimes, and safeguarding Gibraltar’s reputation. Acknowledging the potential of prediction markets to aggregate information and assist in price discovery, the government expressed its aims to create a comprehensive regulatory environment.
Minister Feetham explained the importance of this new framework, stating, "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 noted significant interest from several notable prospective applicants, including some globally recognized businesses.
An independent supervisory panel has been assigned to oversee the implementation of this framework in Gibraltar, bringing experience in managing remote, technology-driven markets and in regulating complex digital environments, according to Feetham.
The initiative to enter the prediction markets was first hinted at by Feetham during an April parliamentary session, where he mentioned that an initial license had been granted to ADI Predictstreet. However, this license was issued under previous legislation, as the new Gambling Act had not yet gone into effect.
The newly published 24-page regulatory document outlines various compliance rules for prediction market operators. Each event contract must be approved and certified by the Gambling Authority, and contracts need to be "clear, capable of objective settlement, not readily susceptible to manipulation and consistent with the regulatory objectives." Operators are required to implement their own systems to prevent market manipulation, insider dealing, and the misuse of confidential information.
The authority reserves the right to restrict or prohibit certain prediction contracts that may be deemed inappropriate, which includes those related to criminal conduct, death, serious injury, terrorism, or warfare.
Gibraltar's first prediction market license was granted to ADI under a "betting intermediary" license. However, the new legislation creates a distinct classification for prediction market activities, replete with its own authorization, operational stipulations, and supervisory framework. Feetham emphasized Gibraltar's adaptive capabilities amid rising gambling taxes in the UK that posed threats to its significant gaming sector. He stated, "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."
WagerWire, a US betting marketplace, is set to become the second license holder in Gibraltar, having secured approval to launch in June. WagerWire co-founder Travis Geiger indicated that their platform aims to roll out a B2B and B2C prediction markets product before the NFL preseason and the commencement of international football in August. Geiger praised Gibraltar’s reputation as a gaming hub, suggesting the framework could 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. 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 license has been adopted."
In his announcement, Feetham recognized that there is currently no settled consensus on how prediction markets are classified, particularly as US regulators continue to debate whether they fall under gambling or financial regulations. He noted that Gibraltar provides an additional regulatory option with its dedicated framework: "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."
Last week, the EU financial regulator ESMA reaffirmed its position regarding specific prediction market contracts under its jurisdiction, particularly those with binary yes-or-no outcomes and fixed payouts. Other European gambling regulators have adopted similar stances, blocking operators like Polymarket and Kalshi from their markets. A coordinated effort by regulators from Belgium, France, Germany, Italy, the Netherlands, Poland, Portugal, and Spain began in June to address concerns regarding consumer risks associated with prediction markets, noting the absence of player safeguards, including mandatory betting limits.
Despite these challenges, Feetham highlighted that Gibraltar’s framework aims to include various safeguards tailored to the operation of exchange-based markets. These encompass measures focused on preventing market manipulation, addressing conflicts of interest, supporting participant protection, ensuring governance, safeguarding client assets, and adhering to anti-money laundering and sanctions compliance, while also providing for financial resources and planning for wind-down situations.
