PREDICTION MARKETS
A category of its own: why Gibraltar built a bespoke regulatory framework for prediction markets IN THE FIRST OF OUR THREE ARTICLES REVIEWING REMOTE ONLINE GAMING HUBS, STEVEN CAETANO ANALYZES GIBRALTAR'S NOVEL APPROACH TO REGULATING EVENT CONTRACTS
policed, how digital-asset settlement is accommodated, and how the Gibraltar framework is supervised and enforced. Prediction markets are neither new nor obviously unregulated. Platforms that allow participants to trade contracts referencing the occurrence, or non-occurrence, of a future event have existed in various forms for years, and they have consistently defied easy classification. In the United States they have been analyzed as event contracts within the derivatives perimeter of the Commodity Futures Trading Commission. In most other markets they have been forced into one of two categories: treated as gambling or treated as financial instruments subject to securities or derivatives rules. Neither category fits comfortably, and the resulting uncertainty has inhibited investment in the sector for many years.
Introduction On 13 July 2026 Gibraltar became the first jurisdiction in the world to enact a standalone statutory framework for prediction markets. The Prediction Market Regulations 2026 (the “Regulations”) do not shoehorn event contracts into the existing categories of betting, gaming or a lottery, nor do they treat them as financial instruments regulated under financial services law. Instead, they create a third, purpose- built category of regulated activity with its own authorization gateway, conduct rules and supervisory architecture. This article examines why the Gibraltar Government concluded that a bespoke system was necessary, and works through the practical questions that operators, investors and their advisers are now asking: what it takes to be authorized, how the products themselves are vetted, how market integrity is
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IMGL MAGAZINE | SEPTEMBER 2026
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