Gibraltar has taken a landmark step when it comes to embracing prediction markets and has become the first jurisdiction in the world to launch a regulatory regime solely covering the prediction markets sector.
The decision builds on the market move to license both ADI Predictstreet and Wire Markets.
As a result of the shift to embracing prediction markets in a regulated way, these two companies will now be regulated under Gibraltar’s new predictions regime.
Travis Geiger, co-founder of WagerWire, stated that the move was a “landmark moment for the prediction market industry”.
“By focusing on market integrity, innovation, and responsible oversight, Gibraltar has established a thoughtful framework that gives operators the clarity they need to build for the long term. We’re incredibly proud to have worked alongside HM Government of Gibraltar throughout this process and excited for what comes next.”
A suprvisory authority will oversee the framework, with Nigel Feetham KC MP, Gibraltar’s Minister for Justice, Trade and Industry, emphasising that the focus is not on labels.
He continued: “Gibraltar’s approach is to regulate innovation responsibly by providing a clear regulatory framework for operators that wish to conduct prediction market activities under this regime, where it is the appropriate regulatory framework for their business.
“The focus is not on labels, but on ensuring that the chosen framework is capable of effective supervision and robust standards of market integrity, transparency, participant protection and financial crime prevention.”
The Gibraltar predictions market regulatory framework will cover the following:
- Market integrity
- Participant protections
- Contract approvals
- Surveillance and anti-money laundering
- Compliance and a sanctions regime
- Use of digital assets, including stablecoins, for funding and settlement
Gibraltar’s stance sees it standalone in Europe as a market that is more than willing to embrace prediction platforms, with much of the rest of Europe shifting in the other direction.
Ahead of the World Cup, nine countries aligned in their vehement opposition to the entry of prediction markets, warning of threat of their growth.
Spain, France, Germany, Italy, Portugal, Belgium, the Netherlands, Poland, and Switzerland signed a collective agreement committing to knowledge and information exchange on how prediction market platforms target their populations.
The Spanish campaign was especially on the front foot, it was led by the Social Ministry (Consumo) and its 2030 agenda. The Ministry has pledged to increase the surveillance of online gambling in the country so that player protection standards can be maintained to a high degree.
On the legality of prediction market platforms and the status they currently have in Spain, Consumo added: “In those countries where they are not authorised, these prediction market platforms operate without the guarantees required by the regulations.
“They may incorporate elements that favor problematic gambling behaviors…lacking effective time or betting limits or having insufficient controls to verify the age of users. Therefore, the authorities will pay specific attention to their activity.”
