Malta Moves to Regulate Prediction Markets—First EU Framework
Malta is actively exploring prediction market regulation, positioning itself as the first EU member to license platforms like Polymarket rather than ban them.
In Brief
- Malta announced it is “actively exploring” a forward-looking legislative framework for prediction markets, positioning itself as the first EU member to regulate rather than ban them.
- The Maltese Gaming Authority confirmed prediction markets already fit within its existing Type 2 and Type 3 licensing categories, with potential updates under review.
- The announcement comes as eight EU countries have banned Polymarket and Kalshi, creating a regulatory vacuum Malta aims to fill.
Malta is moving to become the first European Union member to establish a dedicated regulatory framework for prediction markets, Economy Minister Silvio Schembri announced at the inauguration of Blockchain.com’s Malta office. The move positions the Mediterranean island as a potential hub for platforms like Polymarket and Kalshi that have been blocked across much of Europe, Dyutam reports.
“We are actively exploring a legislative framework for prediction markets,” Schembri said. The sector handled more than $40 billion in combined volume in 2025 and has produced two companies now valued above $20 billion each. Malta previously built the regulatory infrastructure for online gaming and blockchain that other jurisdictions later adopted.
EU Regulatory Vacuum
Malta’s proactive stance contrasts sharply with the rest of Europe. At least eight EU countries have banned or restricted Polymarket and Kalshi, often classifying prediction markets as unlicensed gambling. Spain blocked both platforms this month, joining a growing list that includes Brazil and Indonesia.
Prime Minister Robert Abela’s Labour Party included the prediction market licensing proposal in its election platform ahead of the May 30 polls. If elected, the party said it would empower the MGA to oversee firms offering platforms where users trade on outcomes of real-world events. The proposal has bipartisan support, with the Nationalist Party also signaling openness, AIBC reports.
Critics argue prediction markets effectively operate as gambling sites without complying with traditional licensing frameworks. Unlike conventional betting operators, prediction markets rely on user-driven pricing mechanisms with no central “house” setting odds or taking positions.
Malta’s Regulatory First-Mover Playbook
Malta has a track record of regulatory first-mover advantage. The country established the first comprehensive online gaming licensing framework in the early 2000s and later became Europe’s blockchain and crypto hub with the Malta Digital Innovation Authority Act in 2018. Both moves attracted hundreds of companies to the island.
For prediction markets like Polymarket that are facing regulatory uncertainty in the U.S., a clear EU licensing path through Malta could be an attractive alternative. The CFTC is also weighing Polymarket’s proposal to lift its U.S. ban, but a House insider trading probe complicates that timeline.
The MGA said it remains in ongoing dialogue with stakeholders to determine whether additional guidance may be required. No draft legislation has been published yet, but the exploratory phase signals formal rulemaking is on the horizon.
FAQ
What is Malta proposing for prediction markets?
Malta is developing a legislative framework to license prediction market platforms under its existing gaming authority, with potential regulatory updates tailored to the sector.
Why does this matter for Polymarket and Kalshi?
Eight EU countries have banned these platforms. Malta’s framework could give them a legal pathway to operate within the EU under a regulated licensing regime.
Is Malta’s proposal law yet?
No. The announcement is at the exploratory stage. No draft legislation or implementation timeline has been published. The May 30 election may affect the timeline.
How does Malta compare to other EU countries on this?
Malta is the only EU member actively exploring prediction market regulation. Most others have blocked or restricted the platforms outright under existing gambling laws.
Could other EU countries follow Malta’s lead?
If Malta establishes a successful framework, it could become a template for other EU members seeking to regulate rather than ban prediction markets, similar to its earlier role in online gaming and crypto regulation.
Economy Minister Silvio Schembri made the announcement on March 25, 2026, at the Blockchain.com Malta office inauguration.
