Prediction Markets: Unlicensed betting by another name? WLA calls for global regulation - Part 2
In the first part of this series, we explained how prediction markets have grown at an unprecedented pace by exploiting regulatory gaps. In this second instalment, we examine how the World Lottery Association (WLA) outlines the specific risks facing consumers, sport and the regulated sector, and sets out the responsibilities of each stakeholder.
Unlicensed, uncontrolled: the risks nobody is monitoring
The WLA, together with the organisation United Lotteries for Integrity in Sports (ULIS), identified four areas of urgent concern. The first is the most direct: these platforms operate illegally in dozens of jurisdictions because they have not obtained the gaming or sports betting licences required by law.
For the association, the issue of sports integrity may be the most serious in the long term, because unlike licensed operators, which are obliged to report suspicious transactions to sports integrity bodies, prediction platforms have no obligation to monitor activity or report suspicious transactions. The WLA warns in its document that this makes them a blind spot in the global sports integrity monitoring network, one that can be easily exploited by those seeking to profit from manipulated outcomes.
The USD 400,000 bet that raised alarms in Washington
One specific case illustrates this risk. Shortly before the public announcement of a covert United States operation that led to the removal from power of former Venezuelan president Nicolás Maduro, a small number of newly created accounts placed large, highly concentrated bets on that exact outcome, generating profits exceeding USD 400,000. The specificity and timing of those trades prompted formal calls from US legislators for an investigation into the case, according to the WLA in its position paper.
According to the WLA, consumer protections are virtually non-existent: “Minors can access the platforms, including those based on cryptocurrency wallets, without identity requirements, without effective barriers.” There are no self-exclusion mechanisms, spending limits or affordability checks. People who have already self-excluded from licensed operators can access these platforms without issue and continue betting.
The impact on the social causes funded by regulated lotteries is no small matter either. In the financial year 2024, the global ecosystem of regulated lotteries and sports betting returned USD 109,000 million in support of social causes such as health, education, culture and social welfare. The WLA estimates that if prediction markets captured just 5 per cent of the regulated lottery sector’s annual gross revenues, the annual diversion of resources intended for public benefit would exceed USD 2 billion.
From warnings to bans: how countries are responding to prediction markets
The international regulatory response has begun to take shape, although unevenly. In Europe, for example, Germany and France have issued explicit legal warnings. The Netherlands has issued administrative rulings accompanied by sanctions. Poland, Switzerland, Belgium, Portugal, Romania, and Hungary have blocked or blacklisted these platforms, while Spain has imposed a precautionary block, and the DGOJ, Spain’s regulator, is conducting the relevant investigations.
What is happening with prediction markets in different global jurisdictions is not a coordinated strategy, but a series of individual responses moving in the same direction. Australia has deemed them illegal.
In February 2026, the UK Gambling Commission (UKGC) granted them a brokerage licence. Taiwan, Singapore and India cut off access.
The situation is even more fragmented in the United States: despite federal oversight by the CFTC, more than 10 states have issued cease-and-desist orders, and 7 cases remain before federal courts, while the WLA warns that the litigation could reach the Supreme Court before 2028.
In Latin America, Colombia was the first to block them in January 2026, followed by Argentina in March 2026 and Brazil in April 2026, while Venezuela, Cuba and Nicaragua were already on the official list of restrictions from 2024 because of international sanctions and local regulations, according to information published by Polymarket on its website.
What regulators, sport and operators should do now
The WLA is explicit about what each actor must do. It calls on regulators and governments to adopt a functional definition of sports betting that covers any contract offering a financial return conditional on the outcome of an event, regardless of the name given by the operator.
It asks sports bodies to include restrictions on prediction markets in the codes of conduct of athletes, referees and support staff, with particular attention to the risk of insider information being misused. Licensed operators that have entered these markets, such as FanDuel and DraftKings, which left the American Gaming Association precisely for this reason, are required to apply the same responsible gambling standards as in their main products and to advocate for making those standards mandatory across the entire sector.
The WLA sets out its position in terms so clear that there is no room for middle-ground interpretation: “Any platform that accepts consumer money in exchange for a return conditional on the outcome of a sports competition or other event is operating a betting product and requires the applicable licence in each jurisdiction where it accepts customers. Operating such a platform without a local licence is illegal, regardless of what the product is called.” Ultimately, the message is not to wait for the industry to regulate itself, but for governments to use the legal tools that are, in most cases, already available.
This article was originally published on the Spanish SiGMA News page on 3 June 2026.
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