Prediction markets were placed front and centre at the latest Gaming in Europe webinar, with a panel of legal and gambling experts setting the record straight about the medium’s place in the local market.
Platforms like Kalshi and Polymarket have caused a stir across the regulated gambling sector over the past few years. Many believe that their offer is not much different from sports betting, but prediction market platforms have remained adamant that they are event contracts instead.
In their home market back in the US, these products are regulated by the Commodity Futures Trading Commission (CFTC) as financial investments. In Europe, however, regulators have taken a more staunch stance, branding predictions as a gambling product – therefore banning prediction platforms until they acquire the relevant licence. Such is the case with Spain.
But that still hasn’t stopped the conversation from taking place among local gambling stakeholders. The latest panel was hosted by Josh Hodgson, Chief Operating Officer (COO) at H2 Gambling Capital, as well as Camille Gonzálvez, iGaming Lawyer, and Xavi Munoz Bellvehí, Managing Partner – both part of law firm ECIJA.
To put the global growth of prediction markets into perspective, Hodgson highlighted that the total volume of the vertical reached around $77bn (£57.3bn) in Q1 2026 – more than 10 times in growth over the last 12 months.
Half of all transaction volume came from sports predictions, standing at $40bn and up from the $3.3bn reported in Q1 2025.
Can predictions compare to sports betting?
Is that a direct threat to traditional sports betting platforms though? According to Hodgson, this is a definitive no because of the way prediction markets volume compares to sports betting handle and revenue.
While handle represents the total amount staked by customers, prediction-related volume counts every time a contract is bought or sold, i.e. one $10 position is traded in and out five times – representing $50 in volume.
“Comparing prediction‑market volume to sportsbook handle is like measuring apples by the kilo and oranges by the dozen,” the gambling market analyst said, adding that prediction markets may be growing fast in volume, but their direct comparison to sports betting handle and revenue is overestimated.
Spain takes charge against ‘illegal’ predictions
Regardless, regulators in Europe have been put on a high alert. Gonzálvez, one of ECIJA’s legal guest panellists, noted that prediction markets are a new reality that gambling authorities were not ready to face yet. Until recently, at least.
Spain in particular has opened disciplinary proceedings led by the DGOJ – the Spanish gambling authority – against Kalshi and Polymarket, listing several crucial concerns such as insufficient identity verification mechanics, heightened risk of harm to minors, and self-exclusion controls that are not aligned with Spain’s standards.
An outcome is expected to come between September and October, with both Kalshi and Polymarket facing sanctions of between €5m-€50m, Gonzálvez added, or the possibility of being banned from acquiring a Spanish licence for up to four years.
So much hate, but can there be love?
There is a way out of this, however. Spain has a fully licensed ‘cross-betting’ sector, which features products that are very close to prediction markets – customers bet against each other, operators act as an intermediary, and receive a commission from each placed bet.
But, getting branded as a gambling product would mean that platforms like Kalshi and Polymarket have to abandon the identity they’ve been crafting for years now, distancing themselves as much as they can from the words ‘gambling’ and ‘betting’.
As such, they are more likely to play the long game rather than admitting defeat any time soon.
