Malta is examining how to regulate prediction markets, with Economy Minister Silvio Schembri confirming that the Government is assessing ways to provide legal clarity for the sector.
Schembri said: “We are actively exploring the emerging field of prediction markets, an area experiencing rapid global momentum which presents significant opportunities for innovation, provided it is supported by clear, forward-looking legislative framework that enables it to develop responsibly and at scale.”
He pointed to Malta’s earlier approach to cryptocurrency, noting that the country introduced rules for blockchain and digital assets in 2018 ahead of the EU’s Markets in Crypto-Assets Regulation.
Schembri added: “We recognised early on that users need to feel safe is this industry was going to grow, which means it needed to uphold the highest standards of transparency and compliance.”
If Malta moves forward with regulation, what could operators that gain a Maltese licence expect from different key regions?
The following text explores what a Maltese licence could mean for operators, particularly in terms of market access and regulatory alignment, and how market dynamics might evolve as the sector develops.
United Kingdom
In the UK, the Gambling Commission stated in February that prediction markets “would fall within the definition of a ‘’Betting Intermediary,” similar to betting exchanges, adding that operators such as Kalshi and Polymarket would not be able to classify themselves as non-gambling as they do in the United States. The regulator also warned that unlicensed operators “should take steps” to avoid the British market, citing the risk of criminal liability.
The UK market clearly requires operators to obtain a local licence. The Gambling Commission has, so far, provided the strictest definitions among European regulators regarding prediction markets. What if similar interpretations are adopted in other European jurisdictions?
Europe
In Europe, regulators have taken a strict stance towards prediction markets, with a number of EU authorities ordering operators such as Polymarket to cease trading in their jurisdictions.
What level of access would Maltese-licensed operators have in markets where regulators have taken a strict stance towards prediction markets?
Latin America
With Kalshi already entering Brazil while Argentina has blocked Polymarket, Latin America presents a mixed landscape for prediction markets.
In Brazil, market dynamics may shift as larger operators establish an early presence, raising questions about the opportunities available to new entrants.
What role could a Maltese licence play in helping operators navigate these markets?
Outlook
As Malta continues to explore a regulatory framework for prediction markets, its approach will be closely watched by operators and industry stakeholders. The extent to which a Maltese licence aligns with international market requirements may influence its role across different regions.
Depending on how Malta shapes its framework, could a Maltese licence offer competitive or strategic advantages in more permissive markets for both established operators and possible challengers?
US lawmakers recently introduced a bill to ban prediction market contracts tied to war and death
