As it stands, prediction markets appear to have gained no significant pathway into Europe, Despite lobbying efforts, European regulators have deemed that prediction markets have a ‘questionable regulatory status’ that undermines current gambling regimes.
Yet the subject of the expansion of prediction markets should be considered the most explosive issue in global gambling right now, as deep-pocketed ventures such as Kalshi and Polymarket could redefine the status of gambling as a universal discipline – one that is beyond current regulatory boundaries interpreted by European regulators.
The quest to internationalise Kalshi and Polymarket is viewed as manifest destiny by the VC backers who have priced their investments at a value of more than $20bn – above the valuation of any European gambling PLC.
The lobbying will continue as prediction markets face a reckoning to reshape European gambling and its order governed by heritage players.
Last week, Spain’s DGOJ became the eleventh European regulator to suspend prediction markets platforms, placing them under a ”no-go” status; however, it has given Kalshi a reported four month window to submit a differentiation of how their services differ from online betting.
Though another route has been denied, some light is being shone by the jurisdictions of Gibraltar and Malta. Of the two gambling hubs, Gibraltar has emerged as the most significant outlier in the European debate on prediction markets.
Rather than pondering how such platforms can be excluded from existing regulatory frameworks governing gambling, Gibraltar is exploring how prediction markets platforms can be licensed and supervised within a bespoke regime.
Speaking to SBC, Gambling Commissioner Andrew Lyman confirmed that Gibraltar has already licensed its first incumbent of ADI Predictstreet and intends to authorise others on a selective basis.
“Whilst the current licensee falls under the gambling regulatory regime as an intermediary, the Minister with responsibility for this, Nigel Feetham KC MP, has confirmed publicly that we are looking at a bespoke regulatory model for prediction markets which will bring with it AML and SR obligations,” Lyman said.
“We can also impose licence conditions to limit the offering of undesirable markets.”
The approach forms part of Gibraltar’s wider overhaul of its Gambling Act, as new provisions are scheduled for implementation in 2026. Unlike many European authorities, Gibraltar does not view prediction markets platforms as incompatible with its existing regulatory objectives.
As Lyman had already explained to SBC in January, once implemented Gibraltar’s new Gambling Act will provide an expanded regulatory architecture to govern all services and utilities related to igaming as a high risk sector.
Unlike other jurisdictions this allows Gibraltar to openly assess the merits of prediction markets without being tied to analogue terms of what is remote gambling – a regulatory disciple that Gibraltar has governed since 2004.
“As a small jurisdiction we are agile and whilst the mindset of some jurisdictions is ‘how can we stop this’, our mindset is ‘how can we regulate to jurisdictional advantage whilst guarding reputation,” Lyman explained.
“Prediction markets are meeting consumer and market demand. Prediction markets can be regulated proportionately from an integrity, AML and consumer protection point of view. You just need a can-do attitude.”
It would be fair to say that prediction markets have attracted a considerable amount of criticism – no more so than what’s been seen in the US market, with some states going as far as taking legal actions to prevent the likes of Kalshi and Polymarket from operating.
Over in Europe, criticism – or more so confusion – has also been something which ADI Predictstreet has been the subject of. This has ramped up ever since FIFA unveiled the firm as the official prediction markets partner of the 2026 World Cup.
Its leadership team found itself at the centre of an investigative piece in media publication Josimar, and there has been many ongoings with the company’s site which have raised the eyebrows of the gambling industry.
ADI Predictstreet’s latest move has been to partner with Fanatics’ predictions arm, Fanatics Markets, to launch an interactive FIFA World Cup 2026 Hub experience for US sports fans during this summer’s tournament.
But Gibraltar has decided to greenlight the business, giving it licence to operate as a betting intermediary.
The position places the jurisdiction at odds with regulators across Europe. Authorities in France, Portugal, Romania and Ukraine, among others, have all issued blocking orders against the likes of Polymarket.
In contrast, Lyman argues that prediction markets should not be viewed as a radical departure from existing gambling products.
“Prediction markets, matching buyers and sellers, are an extension of the betting exchange model – new, but not completely,” he noted.
The Commissioner also rejected concerns that licensing prediction market operators could disadvantage Gibraltar’s existing gambling licensees.
“Prediction markets do create competition for existing gambling operators, but may also attract a new cohort of participants,” he said. “Under our regime they have to focus on AML and player protection so there is no regulatory advantage for prediction markets over existing operators.”
Instead, he believes traditional sportsbooks may ultimately choose to develop their own prediction market products or partnerships as the sector evolves. This is recognised as a key element considered in the development of a new Gambling Act to expand economic opportunities attached to the igaming sector.
For Gibraltar, the opportunity is as much economic as it is regulatory. Lyman drew parallels with the territory’s decision to embrace online gambling in the 1990s, long before many European jurisdictions had established licensing regimes.
“Gibraltar has always had a culture of first-mover advantage,” he said. “Operators of gambling derivative products are looking for a reputable home for licensing purposes and putting up the ‘open for business’ sign puts Gibraltar on the map.”
While prediction markets remain contentious across Europe, Gibraltar believes prohibition is unlikely to halt their growth.
“One cannot hold back the tide of progress by banning, blocking or denigrating something that consumers want,” Lyman concluded.
“We are happy to work in a sandbox with prediction markets operators under a licence to ensure the business model works from both a commercial and regulatory perspective. We will still be selective about who and what we licence, but there is no point standing on the sidelines. We would rather jump in and make things work.”