Malta is positioning itself to become the EU’s first jurisdiction with a dedicated licensing framework for prediction markets, according to Economy Minister Silvio Schembri. Prime Minister Robert Abela has pledged to grant the Malta Gaming Authority powers to regulate the sector under a bespoke regime, potentially creating a third regulatory category beyond finance and gambling.
This mirrors Malta’s 2018 crypto strategy, when it established the Virtual Financial Assets Act as a first-mover play ahead of EU-wide regulation. That gambit delivered six years of regulatory relevance before MiCA harmonised crypto rules across all member states. Malta’s VFA applications closed in August 2024, with final transitional licences expiring this month.
The timing is critical. ESMA clarified on 3 July that prediction markets touching MiFID II instruments are derivatives subject to the 2018 retail binary options ban. Malta’s move offers an alternative pathway, but history suggests Brussels will eventually harmonise the space EU-wide, potentially rendering Malta’s framework obsolete within years.
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FXnCO Insight
** First-mover jurisdictions offer short-term market access advantages, but firms should plan for eventual EU-level harmonisation that will override national frameworks.
Source: Finance Magnates