By Anna Barnett, Associate, Hassans International Law Firm, Gibraltar
Prediction markets have spent years trapped between two ill-fitting boxes. Call them gambling, and political or economic markets are often unlicensable. Call them derivatives, and they inherit rules built for professional traders.
The result has been regulation by litigation in the United States (US) and by geo-blocking across much of Europe.
On 13 July 2026 Gibraltar took a different route.
What Gibraltar has done
The Prediction Market Regulations 2026, made under the Gambling Act 2025, create a third category separate from gambling and derivatives. Under the 2026 Regulations, prediction market activity is “a distinct activity” and is not to be treated as betting, gaming or a lottery solely by reason of its characteristics. An authorisation is not a gambling licence and confers no other regulated permission.
However, this is not light-touch regulation. Its stand-out features include:
• Regulator-approved contracts. Nothing is listed unless approved or certified under approved arrangements, and only if clear, objectively settleable and not readily manipulable. There is no US-style self-certification permissible;
• Settlement-source integrity. Sources must be reliable, transparent, verifiable and manipulation resistant;
• A trading-venue rulebook. Controls are required in respect of insider dealing, wash trading and position concentration;
• An appropriateness test for participants, alongside exposure limits and cooling-off periods; and
• Guardrails allowing the Licensing Authority to bar contracts on crime, death, serious injury, terrorism, war or reputational risk.
How it compares
In the US, there are calls for a federal derivatives model, whilst states and courts push back.
In the EU, there is no common framework. Germany says political, economic and social markets cannot be licensed, with Spain, France and Denmark having blocked unlicensed platforms.
The UK and Ireland offer routes only through existing betting law.
Gibraltar, therefore, is the only jurisdiction to have settled the characterisation question by statute and built a bespoke rulebook around it. This is a global first.
Who is in
The Prediction Market Register 2026 lists two operators: Predict Street Limited and Wire Alternative Markets Limited.
Both moved through the Gibraltar earlier pipeline, with the Wager Wire Group also holding a betting intermediary licence, although this is not a pre-requisite to obtaining a predication market authorisation.
Two licensees in three months, without countless interest and pre-authorisation enquiries, says that the bar is high and the Regulator is curating, not racing.
Template or outlier?
Gibraltar has answered the question larger jurisdictions keep litigating.
Whether others follow depends upon how the US turf war resolves; whether Europe ever accepts prediction markets as more than unlicensed gambling; and how the first operators perform under supervision.
Either way, the premise is now on the statute book: a prediction market is neither a bet nor a derivative, but a category of its own.
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