Malta is drafting what could become the European Union’s first dedicated regulatory framework for prediction markets, a move that arrives as major trading platforms expand their reach into the sector.
Malta’s proposed rulebook aims to separate prediction markets from existing financial and gambling regulations
Prime Minister Robert Abela announced that the Malta Gaming Authority will be empowered to license prediction‑market operators, while Economy Minister Silvio Schembri said the government is actively shaping the proposal. If the draft becomes law, Malta would be the first EU member state with a standalone regime for these event‑based contracts.
Unlike the European Securities and Markets Authority, which is still assessing how certain contracts fit within traditional financial services law, Malta’s approach treats prediction markets as a distinct category. The island nation previously introduced a dedicated legal framework for crypto assets in 2018, a model later superseded by the EU’s Markets in Crypto‑Assets regulation (MiCA).
Regulators have spent the past year contending with legal challenges surrounding these markets. The shift toward rulemaking suggests a broader acceptance that prediction markets may merit specific oversight, separate from both securities and gambling statutes.
Industry players broaden distribution through platform integration
Blockchain.com has added Polymarket’s prediction‑market offering to its brokerage app, letting users trade event contracts without leaving the platform. The integration relies on Polymarket’s API and sits alongside spot cryptocurrency trading.
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This rollout reflects a wider trend: operators are moving beyond their own websites to tap the customer bases of established trading platforms. Robinhood already offers event contracts via Kalshi, and Interactive Brokers provides prediction markets alongside equities, options, and futures.
Jump Trading, a leading quantitative firm, announced that it has doubled the size of its dedicated prediction‑markets team this year.
The firm is recruiting talent from diverse backgrounds, including sports betting and accounting, to address the unique data challenges these contracts present. Unlike traditional quantitative strategies that depend on deep historical datasets, many event‑based contracts hinge on limited or infrequent outcomes, making market context a larger factor.
For a firm of Jump Trading’s scale, the expansion signals that prediction markets have grown enough to justify a specialized trading capability.
Confidence is rising.
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In the middle of these developments, the push for dedicated regulation can influence market confidence. Clear licensing rules may lower barriers for institutional investors, while also providing consumer protections that have been lacking in a largely unregulated space.
Regulatory and compliance considerations remain unsettled
Authorities continue to monitor activity on prediction‑market platforms. An ABC News report cited a case where a former White House technical assistant allegedly earned $100,000 by trading Kalshi contracts tied to President Donald Trump’s speeches. Kalshi reported detecting the activity through its surveillance systems and referred the trades to the Commodity Futures Trading Commission.
Malta’s proposal still requires a formal legislative text before it can take effect. Meanwhile, Jump Trading’s hiring drive and Blockchain.com’s integration are recent developments, with the full impact on the market yet to be seen.
The outcome of Malta’s initiative could set a precedent for other EU member states. If the island succeeds, it may prompt additional jurisdictions to consider similar frameworks before the European Securities and Markets Authority finalizes its own guidance.