Malta is exploring a dedicated regulatory framework for prediction markets, with Economy Minister Silvio Schembri announcing that the government is actively studying how to govern the sector. The move would potentially make Malta the first EU member state to establish purpose-built rules for platforms that allow participants to trade on the outcomes of real-world events.
The announcement came during the inauguration of Blockchain.com’s new offices in Malta, where Schembri addressed an audience of digital economy stakeholders. The setting was deliberate: Malta has used similar occasions to signal regulatory intent before committing to formal consultation.
What the Minister 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 a clear, forward-looking legislative framework that enables it to develop responsibly and at scale.” — Silvio Schembri, Economy Minister, Malta
The framing is consistent with Malta’s approach to previous digital economy initiatives: position early, set rules before the market consolidates elsewhere, and attract international operators seeking legal certainty. Malta followed this model with online gaming from 2004 onwards, and repeated it with blockchain and cryptocurrency legislation ahead of most EU peers.
The Prediction Markets Landscape
Prediction markets allow participants to take financial positions on the outcome of future events, from elections and economic data releases to sports results. The category has grown considerably since 2024, primarily driven by growth in the United States, where platforms operate under oversight from the Commodity Futures Trading Commission.
Kalshi, the leading US-regulated platform, recently reached a valuation in the multibillion-dollar range after securing $1bn in capital. Polymarket, which operates under a different model, recorded tens of billions of dollars in trading volume during 2025. The sector’s scale has attracted the attention of regulators across multiple jurisdictions, not all of whom have been welcoming. Denmark’s DGA recently confirmed it lacks the power to block prediction markets without evidence of active Danish market targeting, illustrating how national regulators are scrambling to apply existing frameworks to a product type that does not map cleanly onto established categories.
The core classification question remains unresolved across the EU. A prediction market can plausibly be characterised as a financial instrument under MiFID II, a gaming service under national gambling law, or a crypto-asset service under MiCA, depending on its structural features. The absence of any sector-specific EU legislation means each member state retains broad discretion, and that an MGA licence does not automatically confer access to players in other EU countries.
Why Malta
Malta’s interest is not accidental. The MGA operates one of the most established remote gaming regulatory frameworks in Europe. Its technology-neutral, risk-based supervisory approach means product classification turns on the substance of the service rather than its commercial label. An operator running what is structurally a betting exchange would be assessed as such, regardless of whether it calls itself a prediction market.
That flexibility matters to operators who are uncertain how their products would be classified under a rigid licensing taxonomy. Malta has also maintained a track record of pre-application engagement, allowing operators to seek preliminary guidance on classification before committing to a full licensing process, which reduces the cost of regulatory uncertainty.
The MGA’s 2026 supervisory agenda, published earlier this year, focuses on compliance, player protection, and sports betting integrity. Prediction markets are not explicitly named in that document, which covers the regulator’s near-term operational priorities rather than legislative direction. Schembri’s announcement sits with the Economy Ministry rather than the MGA, suggesting the process is still at the policy-assessment stage rather than the formal rulemaking phase.
The Regulatory Gap and What Malta Could Offer
For operators seeking a regulated European base, the current environment is fragmented. Seven European regulators convened in Madrid last year to discuss cross-border oversight challenges, without producing a unified position on how to handle emerging product categories. Some jurisdictions have moved to restrict prediction markets on the grounds that they constitute unlicensed betting. Others are still assessing.
Malta establishing a formal framework would give operators one defined route to legal compliance within the EU, even if that licence does not passport across borders. For early-stage platforms weighing where to establish a regulated presence, a clear licensing pathway in a credible jurisdiction is itself a commercial asset.
The timing of Schembri’s comments coincides with a period of heightened political scrutiny for the sector in the United States, where a bipartisan Senate bill targeting prediction markets was introduced earlier this month. Increased federal pressure on US-based platforms could accelerate the search for complementary regulated bases in other jurisdictions.
Malta has not indicated a timeline for any formal consultation or legislative proposal. The government’s position at this stage is that it is studying the sector, not that it has committed to a specific regulatory model or licensing category.
Source: Lovin Malta
