The Gibraltar government has launched a formal regulatory framework for prediction markets, revealing it in the Gibraltar Gazette this week. This initiative follows months of preparation and the granting of two licenses, part of the new Gibraltar Gambling Act 2025 overseen by Minister Nigel Feetham.
The regulations adopt an "activity-based and risk-based approach" aimed at addressing various risks associated with prediction markets, such as market integrity, participant protection, and financial crime prevention, while also protecting Gibraltar's reputation. The government document highlights the potential for these markets to aggregate information and aid in price discovery.
In a statement to iGB, Minister Feetham noted, "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 mentioned significant interest from various prospective applicants, including well-known companies.
To oversee the implementation of this framework, an independent supervisory panel has been established, equipped with experience in regulating technology-enabled markets. Feetham first hinted at this regulatory move in April, announcing the initial license granted to ADI Predictstreet. However, this license was issued under earlier legislation, as the new Gambling Act had not yet come into effect.
The 24-page regulatory document includes critical rules for operators, mandating all event contracts to be approved by the Gambling Authority. It stipulates that contracts must be clear, objectively settled, not easily manipulated, and in line with regulatory goals. Operators are required to implement measures against market manipulation, insider trading, and improper use of confidential information.
The regulatory authority reserves the right to restrict or prohibit certain contracts if deemed inappropriate or contrary to public interest, including those tied to criminal conduct, death, serious injury, terrorism, and armed conflict.
While ADI’s license was classified as a "betting intermediary" license, this new legislation clearly distinguishes prediction market activities as an independent category with specific authorization and operational requirements. Feetham emphasized the significance of this framework in adapting to challenges, especially following increased gambling taxes in the UK that have strained Gibraltar’s 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, expects to become the second license holder in Gibraltar, having received launch approval in June. Co-founder Travis Geiger indicated that the platform aims to introduce a B2B and B2C prediction markets product by the upcoming NFL preseason and the start of international football in August. Geiger praised Gibraltar's reputation as a gaming hub, suggesting the regulatory framework could serve as a model for other regions.
In announcing the regulations, Feetham recognized the ongoing debates in the US regarding the classification of prediction markets, which are rapidly gaining traction, notably with operators like Kalshi and Polymarket. He remarked, "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."
He assured that the regulations provide a clear and adaptable framework to support responsible innovation while ensuring high standards in market integrity and participant protection. Last week, the EU's financial regulator, ESMA, reiterated its stance on certain prediction market contracts, including binary options and fixed payouts. In June, several gambling regulators from across Europe convened to express concerns over consumer risks posed by prediction markets, highlighting a lack of safeguards such as mandatory betting limits. In contrast, Gibraltar's framework incorporates protective measures addressing market manipulation, conflicts of interest, and anti-money laundering compliance.
Nicole Macedo, who has extensive reporting experience in Gibraltar, contributed to this coverage.
