PREDICTION MARKETS
Nothing in the Regulations limits those obligations 20 .
Having advised businesses establishing regulated operations in Gibraltar, substance is expected to remain an area of close regulatory focus. While the Regulations deliberately avoid prescriptive thresholds, applicants should anticipate detailed scrutiny of governance arrangements, decision-making structures and the extent to which key functions are genuinely controlled from Gibraltar. Supervision, enforcement and appeals Day-to-day supervision rests with the Gibraltar Gambling Commissioner, with information-gathering, investigatory and sanctioning powers under the Gambling Act expressly designed to supervise prediction markets activity 25 . This follows the compliance culture in Gibraltar. The Licensing Authority may require information, give directions, and vary, suspend or revoke an authorization, and may direct that the section 26 exemption ceases to apply where an operator is in breach 26 . Schedule 3 imports the powers, meanings and relevant statutory provisions under the Gambling Act relevant to the prediction market framework. This aligns with regulation 28 (Modified application of the Act) and the broader structure of the Regulations, which repeatedly emphasize that a prediction market authorization is not a Part 4 gambling license. Appeals fall with the Supreme Court of Gibraltar under Part 6 27 . Significantly, an initial refusal to grant authorization is not itself appealable, which places a premium on getting the application right the first time.
Operators must safeguard money, assets or other value held from or on behalf of participants, with arrangements for segregation, reconciliation, custody, settlement and protection of balances, and must not use participant money or assets for their own account except as expressly permitted by the Licensing Authority 21 . These are requirements more befitting of a market operator handling client funds, and compliment the requirement to maintain adequate financial resources and an approved recovery and wind-down plan providing for the orderly settlement, transfer or closure of contracts and the return or protection of participant money on exit 22 . Substance and outsourcing In Gibraltar substance has always mattered and continues to matter. Gibraltar took a conscious decision 25 years ago when it started to regulate online gambling to ensure it was not characterized as a “brass plate” jurisdiction. An authorized operator must maintain such substantive presence in Gibraltar as the Licensing Authority considers necessary for effective supervision 23 . The Regulations do not prescribe fixed headcount, office footprint or capital figures; instead the Licensing Authority assesses substance by reference to governance, decision-making, operational arrangements and overall presence, proportionate to the nature and complexity of the business. Outsourcing is permitted, but a material function may not be outsourced unless the operator has satisfied the Licensing Authority that it will not impair supervision, market integrity, participant protection or compliance, and in any event, the operator remains responsible for compliance regardless of any outsourcing arrangement 24 . This follows well-established gambling supervisory policy.
An activity-based, risk-based approach This bespoke third category of regulated activity is the
20 Prediction Market Regulations 2026, reg 21 21 Prediction Market Regulations 2026, reg 19 22 Prediction Market Regulations 2026, reg 20 23 Prediction Market Regulations 2026, reg 23(1)
24 Prediction Market Regulations 2026, reg 23(2) and reg 23(3) 25 Prediction Market Regulations 2026, Part 5 and Schedule 3 26 Prediction Market Regulations 2026, reg 5(4) and regs 24-27 27 Prediction Market Regulations 2026, reg 32
IMGL MAGAZINE | SEPTEMBER 2026
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