Malta is looking into a special regulatory framework for prediction markets, which Economy Minister Silvio Schembri described as the next big opportunity for the country’s digital economy.
On Wednesday, Minister Schembri announced that the government is studying how it can regulate prediction markets.
Business Now reported that the comments were made during an inauguration of cryptocurrency company Blockchain.com’s new offices in Malta.
Schembri 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.”
Malta is now among the first countries to discuss a special framework for prediction markets, which have grown considerably since last year.
The prediction markets segment continues to attract global attention, especially as volumes are increasing. Many countries are still having a hard time deciding whether prediction markets are financial instruments, gambling, or a combination of both.
The message of the government was practical in nature, saying that growth is possible when users believe that the market is under proper supervision and operators are meeting proper standards.
The timing is significant because the international regulatory picture remains fragmented. The sector recorded sharp growth in 2025, with major platforms such as Polymarket and Kalshi reportedly handling more than $40bn in combined volume by the end of the year.
As reported last September, Kalshi’s monthly volume was then only around $1bn.
Legal hurdles could cause issues
Even with that momentum, the legal position differs widely across jurisdictions and remains unsettled in major markets.
In the US, recent Commodity Futures Trading Commission guidance, alongside litigation in states including Nevada and Arizona, have contributed to an often contradictory regulatory environment.
In the European Union, there is still no unified regime for prediction markets comparable to MiCA. That absence has left member states to decide their own positions, with some restricting or banning access to leading platforms.
Malta’s proposal could change that dynamic by offering one of the first formal approval routes tailored to prediction market operators.
Key aspects of the rules may include aspects of market integrity, consumer protection, and financial stability, which could cover aspects of insider trading, manipulation, fair payouts, responsible trading, and capital requirements.