Gibraltar’s Prediction Market Regulations: A New Regulatory Category for Emerging Markets

A distinct regulatory category

At the core of the new framework is a clear policy decision: prediction market activity is treated as a distinct regulated activity, rather than as betting, gaming or a lottery.

This distinction is significant. By expressly providing that prediction market activity is not to be classified as traditional gambling solely by virtue of its characteristics, Gibraltar is creating a tailored regulatory perimeter designed to accommodate hybrid products that combine elements of trading, data-driven forecasting and event-based outcomes.

In practical terms, a prediction market contract is defined broadly as an instrument whose value or settlement depends on the occurrence (or non-occurrence) of an event, or the outcome of an index, statistic or result linked to that event. This captures a wide range of products, from political or economic forecasts to sports-related outcome markets.

Authorisation rather than licensing

Another notable feature of the framework is the introduction of a dedicated authorisation regime, separate from the standard gambling licensing model.

Operators wishing to carry on prediction market activity in or from Gibraltar must obtain a prediction market authorisation, unless already covered by an existing gambling licence or financial services permission. The existing gambling licensee (Betting Intermediary) Predict Street Ltd  may choose to migrate to the prediction market authorisation or perhaps have both forms of licence / authorisation in play. The key take away is that there is now a choice to come under either a gambling licence; or prediction market authorisation; or indeed a financial services licence depending on the nature of the prediction market product and any sensitivities around the type of regime it wishes to be authorised under.  Importantly, the regulations clarify that this authorisation is not a licence under the Gambling Act, reinforcing the idea that prediction markets are being regulated through a parallel, purpose-built framework.

Control over products and contracts

The framework places strong emphasis on product-level oversight, particularly through the requirement that prediction market contracts must be approved or certified before being offered.

Operators are required to ensure that contracts are capable of objective settlement, based on reliable and verifiable data sources, and not readily susceptible to manipulation.

The regulator also retains the power to prohibit or restrict certain classes of contracts, particularly those linked to sensitive or high-risk areas such as criminal conduct, violence, or events that may raise public interest concerns.

Market integrity and participant protection

The Regulations impose a comprehensive set of ongoing obligations on authorised operators, many of which resemble those found in financial markets.

These include systems to detect and prevent market manipulation, insider dealing and abusive trading, robust governance and risk management requirements, and detailed conflict of interest controls. Operators must also ensure that disclosures to participants are clear, fair and not misleading, and assess whether participation is appropriate for users, with the ability to restrict access where necessary.

In addition, there are strict requirements relating to client money safeguarding, ensuring segregation and protection of participant funds.

Integration with financial services and digital assets

One of the more forward-looking aspects of the framework is its interaction with financial services regulation.

Where prediction market contracts qualify as financial instruments, operators authorised under the Financial Services Act 2019 may be able to carry on the activity without a separate prediction market authorisation, subject to regulatory alignment.

The Regulations also expressly accommodate the use of digital assets, including stablecoins, for funding accounts and settling transactions, signalling Gibraltar’s willingness to support innovation in payment and settlement infrastructure.

Substance, outsourcing and supervision

Consistent with the broader direction of the Gambling Act 2025, the framework requires operators to maintain a sufficient substantive presence in Gibraltar, ensuring that businesses are capable of effective supervision.

At the same time, outsourcing is permitted but tightly controlled. Operators remain fully responsible for compliance and must demonstrate that outsourcing arrangements do not impair supervision, market integrity or participant protection.

A strategic positioning exercise

Taken together, the Prediction Market Regulations 2026 represent more than a technical addition to Gibraltar’s regulatory framework. They are a strategic positioning exercise, placing Gibraltar among the first jurisdictions to develop a dedicated regime for prediction markets.

The approach combines elements of gambling regulation, financial services oversight and market infrastructure rules, reflecting the hybrid nature of these products.

For operators, suppliers and investors, the new framework offers both opportunity and complexity. It provides regulatory clarity in an emerging sector, while also introducing a level of scrutiny and governance that will require careful structuring and early engagement with the regulator.

Andrew Tait, Head of Betting and Gaming at Ramparts, commented:

“Gibraltar’s approach to prediction markets is both pragmatic and forward-looking, providing much-needed regulatory clarity for a rapidly emerging sector. The framework recognises the hybrid nature of these products while maintaining a strong focus on market integrity and governance. We are also seeing increased interest from businesses exploring prediction market models, and this regime offers a clear pathway for those looking to enter the space in a regulated and sustainable way. It’s notable that Gibraltar is keen to lead the way in this emerging industry which is already disrupting traditional gambling products, to create a safe environment for customers. It will however be up to the prediction market operators to appraise themselves of the legalities of the target markets they provide their services into from Gibraltar”

How Ramparts can assist

Ramparts’ Gaming team is closely monitoring the development of prediction market regulation in Gibraltar and is advising clients on how the new framework applies in practice. This includes assisting with authorisation strategies, structuring of prediction market operations, regulatory classification of products, engagement with the Gibraltar authorities and regulatory analysis of target markets.

Given the novel and cross-sector nature of prediction markets, early legal and regulatory input will be key to ensuring that business models are aligned with the new requirements and capable of being effectively authorised and supervised.