Gibraltar has become one of the first jurisdictions to establish a standalone regulatory regime for prediction markets, distinct from its traditional gambling licensing framework. The Prediction Market Regulations 2026 (LN.2026/176) came into force on 13 July 2026, made by the Minister with responsibility for gambling under sections 34 and 159 of the Gambling Act 2025. Operators, investors, and payment providers active in or considering entry into this fast-growing sector should take note of the framework’s key features and what it means in practice. For summary Q&A click here 

Overview of the New Framework

The Regulations create a dedicated category of regulated activity: “prediction market activity.” This is a deliberate and significant drafting choice. Rather than shoehorning event contracts and prediction markets into existing betting, gaming, or lottery definitions, the Regulations expressly provide that prediction market activity is not to be treated as betting, gaming, or a lottery solely by reason of its characteristics. This gives operators regulatory certainty that has been largely absent in other jurisdictions grappling with how to characterise these products, and positions Gibraltar as offering a purpose-built home for the sector rather than an awkward retrofit.

Authorisation and Exemption Regime

Part 2 of the Regulations establishes the gateway to market. Operators who hold a prediction market authorisation and are entered on the official register benefit from an exemption from the general prohibition on unlicensed gambling-related activity in section 26 of the Gambling Act 2025.
Authorisation is granted by the Licensing Authority where it is satisfied that an applicant meets the core conditions in Schedule 2. These include the familiar pillars of Gibraltar’s regulatory approach:

– Fit and proper status of the applicant and its controllers;

– Substantive presence in Gibraltar, consistent with the jurisdiction’s long-standing “mind and management” expectations for licensed operators;

– Adequate resources, both financial and non-financial, to conduct the business responsibly.

Importantly, this authorisation sits outside and is distinct from the standard gambling licence issued under Part 4 of the Act. Existing Gibraltar gambling licensees will not automatically be entitled to carry on prediction market activity and will need to apply for authorisation in its own right, while new entrants whose business is purely prediction markets can seek authorisation without needing a general gambling licence.

Contract Requirements and Market Integrity

Part 3 focuses on the product itself. Authorised operators may only list prediction market contracts that have been approved by the Authority, or certified under approved arrangements. Operators are required to maintain robust contract rules and ensure that settlement sources are reliable, transparent, and resistant to manipulation a clear response to concerns, raised in other markets, about the integrity of resolution sources for event-based contracts.

Part 4 layers on ongoing conduct requirements that will be familiar in substance, if not in application, to gambling and financial services operators alike:

– Market integrity controls designed to prevent insider dealing and market manipulation;
– Management of conflicts of interest;
– Safeguarding of client money; and
– Compliance with anti-money laundering and sanctions legislation.

Notably, the Regulations expressly permit the use of digital asset payments, including stablecoins, for funding accounts and settling contracts. This is a forward-looking feature that will be of particular interest to operators built on crypto-native rails, and reflects Gibraltar’s broader positioning as a hub for both gaming and digital asset businesses under its Distributed Ledger Technology framework.

Supervision, Enforcement, and Appeals

Day-to-day supervision of authorised operators falls to the Gibraltar Gambling Commissioner, who is given modified versions of the Gambling Act 2025’s information-gathering, investigatory, and sanctioning powers for this purpose. This ensures a degree of continuity with the compliance culture operators will already be familiar with under Gibraltar’s gambling regime, while tailoring the toolkit to the specific risks presented by prediction markets.

Decisions of the Authority or the Commissioner are appealable to the Supreme Court of Gibraltar and must be brought within 28 days of service of the relevant decision. Operators should note, however, that certain decisions are excluded from this appeal right most significantly, an initial refusal to grant authorisation is not itself appealable, which places a premium on getting the application right first time.

What This Means for Operators

For prediction market operators currently operating offshore, under ambiguous regulatory status, or considering a European or internationally recognised base, Gibraltar’s new framework offers a rare combination: bespoke legal characterisation that avoids the definitional disputes seen elsewhere, a regulator with decades of gambling-sector supervisory experience, and explicit accommodation of digital asset settlement. At the same time, the substantive presence requirement and the fit-and-proper threshold mean this is not a light-touch or purely nominal regime applicants should expect the same level of scrutiny associated with Gibraltar’s established gambling licensing process.

Businesses considering an application, or existing Gibraltar licensees looking to expand into prediction market activity, should begin preparing early. Key considerations include structuring for the substantive presence requirement, designing contract rules and settlement source arrangements capable of satisfying the Authority, and ensuring AML/CTF and client money frameworks meet the Part 4 standard from day one.

This briefing is for general information purposes only and does not constitute legal advice. For advice on the Prediction Market Regulations 2026 and how they may apply to your business, please contact Steven Caetano or a member of our Gaming & Regulatory team.

Full text of the legislation: Prediction Market Regulations 2026 LN.2026/176)

https://www.gibraltarlaws.gov.gi/legislations/prediction-market-regulations-2026-8541

Written by Partner Steven Caetano

 

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