Gibraltar has given prediction markets a regulatory framework of their own.

The Prediction Market Regulations 2026 came into force on 13 July 2026. For operators who have faced uncertainty over whether their products fall under gambling or financial services rules, this is a significant development. There is, however, an important caveat: the regulatory treatment still depends on how the specific product is categorised. For example, contracts that qualify as financial instruments may bring financial services rules into play, and firms already holding the relevant permission under the Financial Services Act 2019 may be able to offer them under that permission instead. 

Let's take a closer look at the framework:

🔹 A distinct category: Prediction market activity carried on under the Regulations is a distinct activity. It is not treated as betting, gaming or a lottery solely because of its characteristics as prediction market activity. 

🔹 A dedicated authorisation: The Regulations create a prediction market authorisation, which is expressly not a licence under Part 4 of the Gambling Act 2025. Operating a prediction market in or from Gibraltar requires authorisation, unless the operator already holds a Part 4 licence covering prediction market activity or falls within the financial services route described below. An authorised operator does not need a separate licence under another enactment where that enactment would require one solely because of the activity's characteristics as prediction market activity, and the activity is within the scope of the authorisation. 

🔹 A defined timeline: The Authority must determine a complete application within six months, although it may notify a longer period where exceptional circumstances require additional time. 

🔹 Room for digital assets: The Regulations expressly confirm that nothing in them prevents operators from using digital asset payments, including stablecoins, for account funding, collateral, settlement, payments and withdrawals. Using them does not, of itself, change the legal character of a contract or cause the operator or participants to be treated as carrying on another regulated activity. 

🔹 Approval by contract class: Contract approval covers the class of contract offered, not each individual transaction. Certification under arrangements approved by the Authority is also available. 

🔹 A route for existing financial services firms: Firms with Part 7 permission under the Financial Services Act 2019 do not need a separate authorisation where their contracts are financial instruments and the activity is expressly within the scope of that permission, provided they comply with the 2019 Act and their permission. The Authority may still apply selected requirements of the Regulations to these firms, after consulting the Gibraltar Financial Services Commission. 

🔹 Credibility built in: The regime includes market integrity controls, conflicts management, client money safeguarding, wind-down planning and full AML/sanctions obligations. In my view, these safeguards should help authorised operators show banks, payment providers and institutional partners that they are credible.

What operators need to plan for

Authorisation requires real preparation. Applicants must submit a business plan, contract rules and settlement arrangements, market surveillance controls, safeguarding arrangements and a recovery and wind-down plan. Operators must also maintain the substantive presence in Gibraltar that the Authority considers necessary for supervision. There is no right of appeal against an initial refusal or against conditions imposed at grant. Getting the application right the first time therefore matters.

How we can help

At Hassans, we advise operators, platforms and investors on: 

✔️ structuring and classification analysis

✔️ preparing authorisation applications

✔️ drafting contract rules and settlement source frameworks 

✔️ AML, safeguarding and governance arrangements 

✔️ digital asset payments and DLT structuring 

✔️ ongoing engagement with relevant regulatory authorities

For more information, please contact us: Isabella Lombard / Anthony Provasoli .

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