PREDICTION MARKETS
Gibraltar has adopted a different approach. The Regulations made by the Minister with responsibility for gambling under sections 34 and 159 of the Gambling Act 2025 (the “Gambling Act”), and in force from the day of publication on 13 July 2026 1 , establish what could be the first legal framework anywhere dedicated specifically to prediction market activity. The central question this article addresses is a policy one: why did Gibraltar decide that a bespoke framework was necessary, rather than simply regulating these products under its existing gambling licensing regime or under financial services legislation? The answer lies in how the Regulations classify prediction markets and attach bespoke prediction market-related legal obligations. Both are addressed in turn below. A deliberate act of classification The most striking feature of the Regulations is not any single conduct rule but the drafting choice at their heart. Regulation 4 provides that prediction market activity carried on in accordance with the Regulations constitutes a distinct activity for the purposes of the Gambling Act, and that it is not to be treated as betting, gaming or a lottery solely by reason of its characteristics as prediction market activity 2 . A prediction market is defined broadly as a system, platform or arrangement which facilitates the making, trading or settlement of prediction market contracts, and a prediction market contract is one whose value, return, payment or settlement is determined by reference to the occurrence or non-occurrence of an event, or to a value, index, measure, statistic, result or outcome derived from or connected with such an event 3 . This is a conscious act of legal classification. Rather than stretching the statutory definitions of betting or gaming to accommodate a product they were never designed for, the legislature has recognized prediction market activity as a category in its own right. The practical benefit is certainty. Operators no longer have to litigate, or nervously self-assess, whether their product is a bet, a lottery ticket or a derivative.
The Regulations answer that question at the level of primary policy, and they do so in a way that no existing gambling definition could have delivered without considerable difficulty.
Why the existing Gambling Act was not enough Gibraltar issued a betting intermediary’s B2C license to Predict Street in March 2026. Gibraltar could, in principle, have continued to license prediction market operators under Part 4 of the Gambling Act and left it there. It chose not to, and the Regulations are instructive in this regard. The combination of select parts of the new Gambling Act and the Regulations form the basis of the new framework. First, the risk profile of a prediction market is considered different in kind from that of a conventional betting or gaming operator. The Regulations devote an entire part to ongoing requirements that read far more like the rulebook of a trader than of a bookmaker. Authorized operators must maintain effective arrangements to ensure fair and orderly trading, with systems and controls designed to prevent, detect and address market manipulation, insider dealing, misuse of confidential information, wash trading, self-trading, fictitious transactions, abusive concentration of positions and collusive or disorderly trading 4 . The Licensing Authority may require position limits and other trading controls. These seem more like the concerns of a market supervisor, not the concerns that a traditional gambling license raises. Second, the object being traded is a contract that must itself be vetted, in a way that has no obvious analogue in conventional gambling regulation. This is touched on below. Third, and more subtly, the language of the prediction markets framework signals a different supervisory philosophy. The traditional gambling framework is oriented towards consumer protection and the prevention of gambling-related harm. The prediction market framework keeps those concerns, but adds provisions designed to preserve market integrity, orderly trading
1 Prediction Market Regulations 2026 (LN.2026/176), regs 1 and 2, made under ss. 34 and 159 of the Gambling Act 2025 2 Prediction Market Regulations 2026, reg 4(2) and 4(3) 3 Prediction Market Regulations 2026, reg 3(1) (definitions of "prediction market" and "prediction market contract") 4 Prediction Market Regulations 2026, reg 15
IMGL MAGAZINE | SEPTEMBER 2026
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