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The global organisation representing more than 150 state-authorised lotteries has stepped directly into one of the gambling industry’s most contentious debates, arguing that prediction markets should no longer be allowed to operate outside the regulatory frameworks that govern betting operators.
In a sharply worded position paper, the World Lottery Association (WLA) characterises prediction markets as a form of betting that has effectively avoided many of the obligations imposed on licensed gambling businesses. The document leaves little room for ambiguity. Its title alone frames the organisation’s position: prediction markets are, in the WLA’s view, unlicensed betting operating under a different label.
The intervention matters because the association represents a large segment of the regulated lottery sector worldwide. When it takes a formal stance on a policy issue, regulators and governments tend to pay attention.
Gambling or Investing?
At the heart of the dispute is a question that regulators in different regions have answered very differently: when consumers stake money on the outcome of a sporting event or another future occurrence, is that activity gambling or investing?
The WLA argues the distinction has become increasingly artificial. Its position is that any product offering a financial payoff linked to the outcome of a sporting contest or event should be treated as a bet regardless of how the operator structures or markets the product.
That argument extends beyond gambling regulators. The association is urging both gaming authorities and financial watchdogs to work together to eliminate regulatory gaps that allow prediction market platforms to sit outside the licensing requirements, taxation systems and consumer-protection standards applied to traditional bookmakers.
Focus on Consumer Protection
The organisation’s concern is not limited to classification. It argues that prediction markets present many of the same risks that have justified strict oversight of the gambling sector, including consumer harm, integrity issues and broader social responsibility concerns.
Even in jurisdictions that choose to classify such products as financial instruments, the WLA maintains that equivalent safeguards should still apply. From the association’s perspective, regulatory labels should not determine whether consumers receive protections comparable to those required in licensed gambling markets.
The US Exception
The debate has become particularly visible in the United States, where prediction markets have gained traction under financial-market regulation rather than gambling regulation.
Platforms operating there have promoted contracts tied to political events, economic developments and increasingly, sporting outcomes. Critics within the gambling industry view that model as creating an uneven playing field, allowing operators to offer betting-like products without meeting the same compliance obligations faced by licensed sportsbooks.
The US approach has become a focal point in the wider international debate, with many gambling stakeholders arguing that similar products would face far stricter treatment in other major markets.
Europe Takes a Different Approach
Outside the US, regulators have generally taken a harder line.
Across much of Europe and Oceania, authorities have treated sports-related prediction market offerings as gambling products, meaning operators would typically need a gambling licence to operate legally. Yet the regulatory landscape has started to show signs of movement.
One notable development came in Gibraltar, which recently became the first European jurisdiction to formally license a prediction market platform. The decision has been closely watched throughout the industry because it signals a potential alternative regulatory pathway that could be adopted elsewhere.
The UK’s Established Model
The United Kingdom presents a different model. Similar concepts have existed for years through betting exchanges, where users effectively take positions on event outcomes while operating within a gambling regulatory framework.
The UK Gambling Commission has consistently maintained that prediction market operators targeting British consumers would also fall under its authority. As a result, there has been far less uncertainty over how such products would be classified if they sought to enter the domestic market.
Pressure on Regulators Builds
That divergence between regulatory approaches is increasingly becoming a fault line between established gambling operators and emerging prediction market businesses.
The WLA’s intervention suggests the battle is entering a new phase. Rather than debating technical differences between financial contracts and bets, the association is pushing regulators toward a simpler principle: if consumers stand to win or lose money based on an event’s outcome, the product should face the same scrutiny as gambling.
As prediction markets continue expanding into areas traditionally occupied by bookmakers, pressure from the lottery and wider gambling sectors appears likely to intensify. The industry’s largest institutional voices are no longer questioning whether prediction markets resemble betting. They are increasingly arguing that the debate should already be settled.
Source: lotterydaily.com
