PREDICTION MARKETS
Policing the market Part 4 provides the ongoing regulatory obligations. The market-integrity duty in regulation 15 is noteworthy and designed to maintain effective governance, internal controls and risk management, with senior management made responsible for compliance and adequate records kept to demonstrate it 14 . Operators must identify, manage and disclose conflicts of interest, with specific controls addressing proprietary and connected-person trading, market making, liquidity provision, settlement sources, contract approval and commercial incentives, precisely the pressure points where an operator's interests can diverge from those of its participants 15 . Participant protection is treated expressly by the regulations. Operators must provide participants with information that is clear, fair and not misleading, covering the nature and risks of the contracts, fees, financial exposure, settlement mechanisms and sources, suspension and delisting powers, and complaints handling 16 . Notably, an operator must assess whether participation is appropriate for a given participant, having regard to that person's knowledge, experience and understanding of the risks, and must issue a clear written warning, and may refuse the participant, where it is not 17 . The appropriateness test is a recognizably financial- markets concept, adapted here to a stand-alone gambling product, and it reflects the hybrid characteristics of this framework. From a commercial perspective, applicants should not underestimate the operational implications of these requirements. Designing an appropriateness framework, maintaining objective settlement methodologies and documenting contract governance arrangements are likely to require significant preparation well before an application is submitted. 14 Prediction Market Regulations 2026, reg 16 15 Prediction Market Regulations 2026, reg 17 16 Prediction Market Regulations 2026, reg 18(1) and reg 18(2) 17 Prediction Market Regulations 2026, reg 18(3), reg 18(4) and reg 18(5)
Digital assets and crypto-native settlement Nothing in the Regulations prevents an authorized operator from using digital asset payments, including stablecoins, to fund participant accounts, provide collateral, settle transactions or make payments to and withdrawals by participants 18 . Furthermore, the use of a digital asset payment does not, of itself, change the legal categorization of a prediction market contract, nor cause the operator or a participant to be treated as carrying on some other regulated activity solely by reason of that payment 19 . Gibraltar already has a well-established framework for the licensing and regulation of digital assets under its distributed ledger technology legislation. Therefore, digital assets remain subject to the AML, sanctions and safeguarding requirements discussed below, and using them does not knock the operator out of the prediction- market category. The inclusion of express digital asset provisions is unsurprising given Gibraltar's long-standing focus on distributed ledger technology and digital asset businesses. In discussions with market participants, crypto-native settlement is frequently viewed not as an optional feature but as a core component of many proposed business models. Few competing jurisdictions currently offer such certainty. Financial crime, sanctions and client money The prediction markets framework does not create a carve-out from Gibraltar's financial-crime framework; it reinforces it. An authorized operator must maintain effective systems and controls to prevent and detect money laundering, terrorist financing, proliferation financing and sanctions breaches, and must comply with the Proceeds of Crime Act 2015, the Sanctions Act 2019 and any other applicable enactment.
18 Prediction Market Regulations 2026, reg 22(1) 19 Prediction Market Regulations 2026, reg 22(2)
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IMGL MAGAZINE | SEPTEMBER 2026
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