Germany’s gambling framework currently leaves little room for prediction markets such as Kalshi and Polymarket. The platforms offer event contracts funded with stablecoins, settled through code and held in wallets. German authorities addressed whether those products can enter the regulated market on September 5, 2025.
The Gemeinsame Glücksspielbehörde der Länder (GGL), Germany’s joint gambling authority, issued a warning concerning betting on public events. The notice named Polymarket and referred to contracts concerning the war in Ukraine.
German Rules Focus on the Event
Under the 2021 State Treaty on Gambling, bets involving political elections, court decisions, natural disasters and comparable non-sporting events cannot receive a German gambling license. The treaty was signed by all 16 federal states in October 2020.
Sports betting in Germany remains within the licensing system when operators can establish outcomes through verifiable sporting results. Prediction markets covering elections, legal rulings or political developments fall outside the available licensing route.
The GGL also stated that organizing, brokering, advertising and participating in these wagers can result in penalties, extending potential enforcement beyond operators to users and promotional partners.
Germany’s position differs from some US disputes. In July, a federal judge blocked Minnesota’s prediction-market ban after finding that federal commodities law likely displaced parts of the state measure. That federal preemption argument offers no equivalent route under Germany’s gambling framework.
Crypto Infrastructure Creates Compliance Issues
Stablecoin settlement can bypass traditional banks and card networks, while deployed smart contracts have no conventional registered office. German enforcement therefore focuses on identifiable parts of the distribution chain, including websites, hosting providers, advertising, affiliates and payment services.
The GGL has also faced limits on its enforcement powers. In March 2025, Germany’s Federal Administrative Court ruled against the authority, finding that the treaty did not provide enough authority to require internet access resellers to block gambling websites. The regulator has since worked through hosting providers and sought broader powers.
Research commissioned by the GGL and conducted by the Blockchain Research Lab puts channelization at 77.03%. Unlicensed platforms generated an estimated €547 million in gross revenue during 2024, compared with €466 million in 2023, accounting for about 22.4% of all stakes.
Existing Rules Challenge On-Chain Markets
Even if Germany created a licensing route, existing requirements would create technical difficulties. Deposits are capped at €1,000 per month across licensed sites, users must be at least 18, and operators check the OASIS self-exclusion register before accepting play. The market also applies a 5.3% tax to every stake.
Wallet-based platforms cannot easily verify deposits across different operators because wallets lack centralized transaction history. Self-exclusion presents another challenge because blockchain transactions execute once submitted.
A compliance check could occur through an interface, although users could bypass it by accessing the contract directly. Alternatively, smart contracts could require wallet approval against a national register before trading. That would significantly alter the open structure of many on-chain markets.
Germany’s 2026 review of the State Treaty could address enforcement powers and the boundaries of the regulated market, determining whether event contracts eventually receive a distinct category or remain outside Germany’s licensing system.
Source:
“Can Prediction Markets Get Licensed in Germany?”, thecoinrepublic.com, August, 3, 2026
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