Gibraltar Bets on Prediction Markets With World-First Dedicated Regulatory Framework

Gibraltar is carving out a new position in the fast-expanding prediction markets industry, becoming the first jurisdiction to build a regulatory system designed exclusively for companies operating in the sector.

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The British Overseas Territory has already taken its first practical steps. ADI Predictstreet has been licensed under an existing betting intermediary framework, while Wire Markets has secured approval in principle. Both companies are expected to transition onto a new standalone prediction markets licence once the legislation is formally introduced.

Rather than folding the industry into gambling or financial services rules, Gibraltar is creating a separate regulatory structure tailored to prediction markets. Oversight will fall to a dedicated supervisory authority, mirroring the role played by the territory’s Gambling Commissioner in the licensed gaming sector.

Justice, Trade and Industry Minister Nigel Feetham said the government’s objective is not to debate how prediction markets should be labelled, but to ensure businesses operate within a framework capable of delivering effective supervision, protecting participants and maintaining confidence in the integrity of the markets. The proposed regime is also intended to strengthen transparency while addressing financial crime risks.

Crypto and market oversight at the centre

The framework is expected to regulate core operational areas including market integrity, participant safeguards, approval of prediction contracts, surveillance, anti-money laundering controls, compliance obligations and enforcement powers. It will also establish rules governing the use of digital assets, including stablecoins, for funding accounts and settling transactions.

That final element reflects the way much of the global prediction market industry already operates. ADI Predictstreet is built on the blockchain-based ADI Chain, developed by UAE technology company ADI Foundation. Polymarket, one of the world’s largest prediction platforms, relies on the USDC stablecoin and operates on Polygon’s blockchain infrastructure.

Questions surrounding market integrity have become increasingly significant as prediction platforms have grown in popularity. Polymarket, in particular, has faced scrutiny over concerns that trading on markets linked to elections and geopolitical conflicts could expose participants to potential insider information, adding to wider regulatory unease surrounding the industry.

A fragmented global regulatory landscape

Outside Gibraltar, prediction markets remain a legal grey area in many parts of the world. Regulators in countries including France, Belgium, Singapore, Portugal, Argentina and Italy have generally treated the platforms as unlicensed gambling operations, blocking or restricting access.

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The United States, where modern prediction markets gained momentum through companies such as Kalshi and Polymarket, has hardly produced a settled regulatory model either. Kalshi is valued at around $22 billion, while Polymarket has reached an estimated valuation of $15 billion, yet disagreement over how the businesses should be supervised continues.

At the federal level, the Commodity Futures Trading Commission has maintained that prediction markets can qualify as legitimate financial products. Several state regulators have taken a different view, leading to legal battles involving Arizona, Connecticut, Illinois, Minnesota, New Mexico, New York, Rhode Island and Wisconsin, with Nevada also among the states challenging the industry’s expansion.

Against that backdrop, Gibraltar is positioning itself as one of the few jurisdictions actively welcoming the sector instead of attempting to restrict it.

A strategic move beyond gambling

The move also fits into a broader overhaul of Gibraltar’s gambling legislation. The government has been advancing a new gambling bill intended to modernize existing regulation at a time when the territory’s gaming industry is adapting to changes in the UK’s tax regime.

That relationship remains economically significant. Gambling contributes roughly a quarter of Gibraltar’s gross domestic product, with the UK continuing to serve as the primary market for many operators licensed on the Rock.

By introducing a bespoke framework rather than adapting existing gambling or financial regulations, Gibraltar appears to be betting that prediction markets will become a lasting part of the digital economy rather than a short-lived trend.

Industry participants have welcomed the approach. Travis Geiger, co-founder of California-based WagerWire, whose company operates Wire Markets, described the framework as a milestone for the sector, arguing that it provides operators with long-term regulatory certainty while emphasizing market integrity, responsible oversight and innovation. He also said the company had worked closely with the Gibraltar government during development of the new regime and viewed the launch as the beginning of a broader expansion for the industry.

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Source: sbcnews.co.uk