Germany: GGL warns against illegal prediction market participation

The German Gambling Authority (GGL) has issued a warning noting that social betting and prediction markets are illegal. The regulator emphasised that participation in such activities can be considered a criminal offence.

It has published a FAQ section on its website explaining the legal framework. Operators of such activities can also face criminal sanctions, which can be avoided by blocking German users. 

The GGL is hardly the only European regulator issuing such a stance. Most recently, the Italian ADM issued an order which placed Polymarket on the country’s gambling black-list.

Following this, and earlier political pressure, Italian football club Lazio terminated its sponsorship agreement with the operator. 

Interestingly, Polymarket is the official US prediction market partner of the German Bundesliga. Nevertheless, the Bundesliga has not yet faced such a vocal public and political backlash against its relationship with the operator as Lazio did in Italy. 

Indeed, Polymarket and other prediction markets face extensive regulatory scrutiny in Europe. Other countries that have either blocked or restricted Polymarket include Ireland, Belgium, Romania, Switzerland, Poland, the Netherlands, Greece, Portugal, Spain, Ukraine and the Czech Republic. 

Criticism of prediction markets stretches beyond Europe. In the US, numerous states are trying to block such operators, arguing that they are not compliant with state regulations, with many legal cases currently underway.

Nevertheless, some operators recieve strong backing from the Commodity Futures Trading Commission (CFTC), effectively shielding them from state interventions. 

For example, CFTC recently exercised emergency authority over Kalshi after New York's latest legal action against the prediction-market exchange raised the prospect of disruption to its nationwide event-contract operations.

 The CFTC ordered Kalshi to continue operating in accordance with the Commodity Exchange Act's Core Principles after the exchange notified the regulator of a market emergency.