Malta eyes licences for prediction market firms amid proposed digitalisation growth

Malta could allow its gaming regulator to license prediction market companies under proposals unveiled by Prime Minister Robert Abela on Friday.

Both the governing Malta Labour Party and the Nationalist Party are announcing a series of proposed reforms as the country prepares to go to the polls May 30.

If elected, the Labour party said it would empower Malta’s regulator to oversee firms offering platforms where users can trade on the outcomes of real-world events, such as elections, entertainment awards or geopolitical developments. These platforms, known as prediction markets, allow users to set odds among themselves, rather than relying on a central bookmaker.

“Our economy must be resilient, intelligent and competitive,” Prime Minister Robert Abela said, adding that the world was moving towards a “fifth industrial revolution”.

The initiative forms part of a broader Labour Party policy platform that also pledges to create around 1,300 additional jobs in the gaming and esports sectors, building on the current workforce of about 14,000.

Prediction markets move to the mainstream

The proposal comes as prediction markets draw increasing global scrutiny.

Proponents say prediction markets can offer valuable insights by aggregating public expectations and probabilities, positioning them partly as information tools as well as financial products.

Critics argue such platforms effectively operate as gambling sites without necessarily 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. Concerns are particularly pronounced in the United States, where the American Gaming Association (AGA) has signalled unease about the rise of such platforms. “The legal state- and tribal-regulated gaming industry continues to demonstrate resilience and adaptability in a dynamic economic environment,” AGA president and chief executive Bill Miller said in recent commentary, noting that operators are continuing to invest despite shifts in competition and regulation.

That structure has sparked debate among regulators and industry stakeholders, particularly because the platforms often allow trading on sensitive or controversial topics. Beyond sports, markets can include political elections, cultural events and even geopolitical tensions. Some contracts have reportedly covered scenarios such as the timing of potential military actions.

Malta seeks to regulate prediction markets

Malta’s move signals an attempt to bring such activity within a regulated framework, as the country seeks to preserve its status as a hub for digital services. Its economy has long been closely tied to sectors such as iGaming, financial services and technology, all of which rely on forward-looking regulatory systems.

In March, Economy Minister Silvio Schembri confirmed that the Government was “actively exploring” a legal framework that would provide regulatory clarity to online prediction markets.

SOFTSWISS recently became the first Malta-based company to launch prediction market software for iGaming operators.

Its software is built on a fixed-odds framework, giving operators greater control over pricing and margins and allowing them to manage risk within familiar sportsbook structures.