Malta is assessing how to introduce a legal structure for prediction markets, positioning itself among the earliest European jurisdictions to formally address a sector that has expanded rapidly in recent years. Government officials have indicated that this area is being examined as part of a broader effort to support new segments within the country’s digital economy.
Economy Minister Silvio Schembri confirmed that work is underway to evaluate how such markets could operate within a regulated environment. The initiative reflects a wider trend, as interest in these platforms has accelerated globally, particularly in the United States where both regulatory bodies and investors have been actively engaged.
Prediction markets enable users to speculate on the outcomes of real-world events, ranging from political developments and economic indicators to sports results and other measurable scenarios. Their structure effectively turns forecasting into a tradable activity, attracting both retail participants and institutional attention.
Government Signals Focus On Regulatory Clarity
During remarks delivered at the opening of new offices for Blockchain.com in Malta, Schembri outlined the government’s approach to the sector. He stated: “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.”
The minister also referenced Malta’s earlier regulatory initiatives, particularly in blockchain and crypto assets, which were introduced ahead of broader European legislation. That earlier approach helped establish the country as a recognised hub for digital industries.
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.”
Authorities have indicated that similar principles could guide the development of any future framework for prediction markets. The emphasis remains on ensuring that users operate within a system that provides oversight and maintains standards for operators.
Rapid Market Growth Draws International Attention
The global expansion of prediction markets has been accompanied by increasing trading volumes and high-profile valuations. Platforms such as Kalshi and Polymarket, both based in the United States, have reported substantial activity levels, with combined volumes reaching tens of billions of dollars during 2025.
Kalshi alone has drawn attention for its valuation, which has reportedly approached $20 billion. At the same time, earlier figures suggested that its monthly trading volume stood near $1 billion before accelerating alongside broader market growth.
Regulatory developments in the United States have played a significant role in shaping the sector. The Commodity Futures Trading Commission has provided oversight that allows certain platforms to operate within defined parameters, although legal challenges and differing state-level interpretations have created a complex environment.
In Europe, the situation remains less defined. There is no unified framework comparable to existing rules for crypto assets, leaving individual countries to determine how to classify and regulate prediction markets. Some jurisdictions have opted to restrict or block access to certain platforms, contributing to a fragmented regulatory landscape.
Malta’s Strategy Reflects Earlier Digital Policy Moves
Malta has previously taken early positions in emerging industries, particularly in online gaming and blockchain. In the early 2000s, it developed a structured approach to iGaming regulation, which contributed to its reputation as a key European hub for operators. Later, the introduction of crypto-related legislation reinforced that positioning.
The current exploration of prediction market regulation follows a similar pattern. By considering a dedicated framework, Malta could provide companies with a clearly defined legal environment, potentially allowing them to serve a broader European audience from a single jurisdiction.
Officials have also highlighted the importance of market integrity and consumer safeguards. Any future rules could address areas such as manipulation risks, fair payout structures, capital requirements, and responsible participation.
At present, the initiative remains in a preliminary phase. However, the direction outlined by policymakers indicates that Malta is preparing to engage with a sector that continues to gain traction globally. If implemented, a regulatory structure could alter how prediction market operators approach the European market, particularly given the absence of a consistent framework across the region.
Source:
Malta moves to shape rules for prediction markets, businessnow.mt, March 25, 2026.
