The Gibraltar government has officially launched a new regulatory framework aimed at overseeing prediction markets, following months of preparation and the granting of two licenses. This formal announcement was made on Monday through the Gibraltar Gazette and is part of the new Gibraltar Gambling Act 2025.
The newly established regulations adopt an "activity-based and risk-based approach" to monitor prediction markets, focusing on various risk factors such as market integrity, participant protection, financial crime prevention, and Gibraltar's reputation. Additionally, the framework acknowledges the positive role prediction markets can play in aggregating information and facilitating price discovery.
Minister for Justice, Trade and Industry, Nigel Feetham, emphasized the collaborative process behind the framework's development, 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 a high level of interest from potential applicants, including several internationally recognized firms. An independent supervisory panel has been set up to monitor the implementation of this framework in Gibraltar, with members experienced in regulating complex digital and remote markets.
Feetham hinted at this regulatory move during an April parliamentary session, when he indicated that the first license was issued to ADI Predictstreet. However, this license fell under previous legislation since the new act was not yet fully in force.
The detailed regulatory framework, a 24-page document, includes rules stipulating that all event contracts must be approved and certified by the Gambling Authority. Moreover, these contracts are required to be clear, objectively settled, not easily manipulated, and aligned with the overall regulatory objectives. Operators are mandated to have systems in place to prevent market manipulation, insider trading, or misuse of confidential information, and the authority maintains the right to restrict or prohibit contracts deemed inappropriate or contrary to public interest, such as those related to illegal activities or war.
Gibraltar's first licensed prediction market operator, ADI, operated under a "betting intermediary" license, but the new regulations distinguish prediction market activities as a separate category with its own licensing and supervision requirements. Feetham stated that this marks Gibraltar's nimbleness in adapting to challenges, particularly after gambling tax increases in the UK threatened the gaming sector reliant on the UK market.
He noted, "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 Gibraltar's second licensee, having received approval for operations in June. WagerWire co-founder Travis Geiger announced plans to launch a prediction markets product for both B2B and B2C markets by the NFL preseason and the start of international football in August. Geiger highlighted Gibraltar's standing as a gaming leader and expressed that this framework could serve as a model for other jurisdictions, asserting, "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 licence has been adopted."
Feetham addressed the ongoing global debates regarding the characterization of prediction markets, noting that various financial and gambling regulators, particularly in the U.S., have struggled with whether these markets should be classified as gambling or financial activities. He remarked, "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 affirmed the importance of the regulatory framework in supporting innovation while upholding high standards of market integrity and participant protection. Last week, the EU financial regulator ESMA reiterated its position on certain prediction market contracts under its jurisdiction, while other European gambling regulators have taken a more restrictive stance, blocking significant operators like Polymarket and Kalshi from operating within their borders.
In June, a coordinated effort among various European regulators raised concerns about the potential risks to consumers due to inadequate player protections, noting the absence of mandatory betting limits or cooling-off periods. Despite these challenges, Feetham asserted that Gibraltar's framework includes safeguards addressing operational characteristics of exchange-based markets, encompassing measures for market manipulation, conflicts of interest, participant protection, governance, safeguarding client assets, anti-money laundering regulations, and available financial resources for wind-down planning.
