After months of preparation and the granting of two licenses, the Gibraltar government has officially introduced a framework to regulate prediction markets. This announcement was made by the Ministry for Justice, Trade and Industry, under the leadership of Minister Nigel Feetham, with the regulations published in the Gibraltar Gazette on Monday as a component of the new Gibraltar Gambling Act 2025.
The framework aims to employ an "activity-based and risk-based approach" to regulation, addressing various concerns, including market integrity, participant protection, financial crime prevention, and the safeguarding of Gibraltar’s reputation and operational resilience. The government highlighted the value of prediction markets in aggregating information and aiding price discovery.
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 also noted that there has been considerable interest from prospective applicants, including some well-known global companies.
To oversee the implementation of the framework in Gibraltar, an independent supervisory panel has been established. This panel consists of experts experienced in managing remote, technology-driven markets and regulating complex digital environments, according to Feetham.
The initiative to venture into prediction markets was first suggested by Feetham in April during a parliamentary session. He confirmed that an initial license had been awarded to ADI Predictstreet, but due to the incomplete enactment of the new Gambling Act, the license was governed by previous legislation.
The regulatory document, spanning 24 pages, specifies several key rules that prediction market operators must follow. Each event contract must receive approval and certification from the Gambling Authority. These 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 systems that prevent market manipulation, insider trading, and the misuse of confidential information. The authority will retain the ability to impose restrictions on specific prediction market contracts that it deems inappropriate or contrary to public interest. This includes contracts related to criminal acts, death, serious injury, terrorism, or instances of war.
Gibraltar’s initial prediction market licensee, ADI, was issued a license classified as a “betting intermediary.” However, the new legislation establishes prediction market activity as its own statutory category, complete with unique authorization, operational protocols, and supervisory standards. Feetham remarked that this initiative illustrates Gibraltar’s flexibility, especially in light of recent gambling tax increases in the UK that posed challenges to the territory’s gaming sector serving primarily 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 expressed.
WagerWire, a betting marketplace based in the United States, is set to become the next licensee in Gibraltar after obtaining approval to launch in June. Co-founder Travis Geiger revealed that the California-based platform plans to introduce a B2B and B2C prediction markets product in time for the NFL preseason and the start of international football in August. Geiger commended Gibraltar’s standing as a gaming leader and anticipated that the framework would serve as a model for other jurisdictions.
He stated, "I think this is the beginning of the end of the wild west and the taming of the frontier. What Gibraltar has done is assert itself as the first to roll out the new rules, demonstrating a history of excellence. I believe that their framework will be adopted by countries with or without their own gaming authority, similar to how their gaming license has already been embraced."
Feetham's announcement about the regulatory framework also acknowledged the uncertain global consensus on the classification of prediction markets. Ongoing debates among financial and gambling regulators in the United States revolve around whether this vertical, which has surged in popularity alongside operators like Kalshi and Polymarket, should be regulated as gambling or financial activities.
He noted, "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 also highlighted that the prediction market sector is rapidly evolving. He believes that the new regulations deliver a clear, adaptable framework that supports responsible innovation while upholding high standards of market integrity, participant protection, and regulatory oversight.
Last week, the European Securities and Markets Authority (ESMA) reaffirmed its position on specific prediction market contracts under its jurisdiction, particularly those with binary outcomes and fixed payouts. Additionally, several gambling regulators across Europe have blocked major operators such as Polymarket and Kalshi from operating within their borders.
In June, a coordinated effort by various European gambling regulators from Belgium, France, Germany, Italy, the Netherlands, Poland, Portugal, and Spain highlighted concerns regarding consumer risks in the absence of adequate player protections, like mandatory betting limits or cooling-off periods. However, Feetham insisted that Gibraltar's framework has incorporated certain safeguards that reflect the characteristics of exchange-based markets. This includes measures against market manipulation, conflicts of interest, participant protection, governance, safeguarding client assets, anti-money laundering, and compliance with sanctions, alongside provisions for financial resources and wind-down planning.
