Gibraltar Just Created the World's First Dedicated Prediction Market Regulatory Framework
Gibraltar's Prediction Market Regulations 2026 came into force on July 13, making Gibraltar the first jurisdiction in the world to create a standalone regulatory category for prediction markets — explicitly separate from gambling law. Licensed operators ADI Predictstreet and WagerWire received the first approvals. The framework allows stablecoins for deposits and settlement, restricts death and terrorism contracts, and is designed by Gibraltar as a potential European standard.
Gibraltar's Prediction Market Regulations 2026 came into force on July 13, making the British Overseas Territory the first jurisdiction anywhere in the world to establish a dedicated regulatory framework for prediction markets — a standalone licensing category separate from gambling law, financial services regulation, and the hybrid approaches other jurisdictions have tried to apply. The framework was carved out from Gibraltar's Gambling Act 2025 as a distinct product category, overseen by a dedicated supervisory authority modeled on the Gibraltar Gambling Commissioner. The first licensed operators under the new regime are ADI Predictstreet and WagerWire, both of which received approvals ahead of the framework's effective date.
The framework's core contribution is a definition of what a regulated prediction market is, and what it is not. Operators must ensure that all event contracts are objectively settleable, manipulation-resistant, and meet a set of regulatory objectives. Contracts tied to death, criminal activity, terrorism, serious injury, or armed conflict are explicitly restricted — a list similar to the CFTC's proposed rule published in the US Federal Register in June, which is currently in its public comment period. Crucially, the regulations permit digital assets including stablecoins for funding participant accounts, providing collateral, settling contracts, and processing withdrawals, without requiring the operator to obtain a separate financial services licence for those functions. That provision directly addresses the operational friction that has blocked compliant prediction markets from entering stablecoin-native markets like Polymarket.
The timing is the most pointed aspect of the announcement. Gibraltar published its framework on the same day Italy's ADM re-blocked Polymarket as an unlicensed gambling operator for the second time — a contrast the industry was quick to note. Both events occurred in Europe, on the same date, representing diametrically opposite regulatory responses to the same category of product. Gibraltar's explicit argument is that the framework gives regulators across Europe a working template: rather than shoehorning prediction markets into existing gambling or financial services law, where the product never quite fits, build a purpose-written regime that addresses how these products actually operate. Gibraltar has explicitly stated its ambition to set the European standard.
Whether Gibraltar's framework translates to meaningful market access depends on what comes next. The UK Gambling Commission and the FCA operate separately and would each need to adopt their own position before Kalshi or Polymarket could serve UK retail customers. The EU's MiFID II financial instruments framework and the gambling laws of individual member states would each need to be navigated for broader European access. But Gibraltar's move matters for two structural reasons. First, it provides a working regulatory blueprint — language, definitions, operator requirements, contract restrictions — that other jurisdictions can adapt rather than write from scratch. Second, ADI Predictstreet, one of Gibraltar's first licensed operators, already has a partnership with Kalshi and secured CFTC approval to operate in the US market; its Gibraltar licence is the first brick in a potential cross-Atlantic regulatory structure for the sector.
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Recent updates
Utah Files Felony Charges Against Kalshi and Its Founders — Second State to Criminally Charge a Platform
Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, on October 28 — 13 felonies and a misdemeanor, including a second-degree 'pattern of unlawful criminal activity' count and 12 counts of online gambling promotion. The charges stem from a September sting in which an undercover agent placed 12 sports wagers verified to be in Utah. The CFTC sued Utah the day before to block state enforcement, its tenth such suit. Utah is the second state after Arizona to criminally charge Kalshi, and the first to charge the founders personally. Kalshi called it a 'crazy overreach.'
NBA Names Kalshi and Polymarket Preferred Exchanges — Leaving the NFL Alone in Opposition
The NBA announced on October 26 that it has named Kalshi and Polymarket its 'preferred prediction market exchanges,' signed a non-binding memorandum of understanding with the CFTC on basketball integrity, and expanded its DraftKings deal to include prediction markets — the first league to extend a sportsbook partnership into the category. The exchange deals bar league and team personnel from trading NBA contracts, limit permissible markets, and require sharing of suspicious-trading data, in exchange for NBA intellectual property and official data. The NBA joins MLB, the NHL, and MLS as partnered leagues, leaving the NFL as the lone major holdout — and the only league fighting the platforms in court.
CFTC Chair Says Agency Is Watching Prediction Markets for Manipulation Ahead of Midterms
CFTC Chairman Michael Selig said on October 23 that the agency is closely monitoring prediction markets for manipulation ahead of the November 3 midterms, and that it is separately scrutinizing oil market trading tied to President Trump's announcements about the war in Iran. Combined midterm open interest on Kalshi and Polymarket stood at $250 million as of October 18, with Kalshi holding 84%. Selig acknowledged the agency often catches political figures attempting to trade 'oftentimes after the fact.' The remarks highlight the CFTC's dual and somewhat conflicting role as both the platforms' federal protector and their manipulation watchdog, at a time when the agency has shed enforcement staff.