World Lottery Association calls for prediction markets to be treated as ‘gambling’

“Any product that offers a financial return contingent on a sporting or event outcome is a bet, and must be regulated accordingly”

In response to the rapid and largely unregulated expansion of prediction markets, the World Lottery Association (WLA) has released the Position Paper: Prediction Markets: Unlicensed Betting by Another Name — Threats to Sports Integrity, Consumer Protection, and the Lottery and Betting Sector.

The WLA calls for urgent alignment between gaming and financial market regulators to close regulatory gaps and ensure prediction markets are subject to the same licensing, integrity, return to society and consumer protection standards as betting, and calls for a functional, substance-based regulatory test.

The WLA said: “Any product that offers a financial return contingent on a sporting or event outcome is a bet, and must be regulated accordingly, whatever label the operator chooses to attach to it. Gambling regulators should explicitly assess and determine the legal qualification of prediction market products, to avoid regulatory gaps and ensure that functionally equivalent activities are subject to equivalent regulatory requirements.

“Jurisdictions which choose to classify such offerings as financial products, to nonetheless require the application of safeguards and constraints equivalent to those applicable to gambling, given the comparable consumer-protection, integrity and harm-prevention risks involved.”

The Paper addresses the central challenge prediction markets pose to regulated lotteries, licensed betting operators, and the integrity of sport worldwide, and incorporates the perspectives of the United Lotteries for Integrity in Sports (ULIS) on matters relating to sports integrity.

It highlights the significant growth of global prediction market transaction volumes to more than USD 13 billion per month by late 2025, and US$26bn in January 2026, with an estimated 90% or more of current volume driven by sports and other event contracts.

The Position Paper explains why the WLA opposes the unregulated and unlicensed operation of prediction markets and calls upon regulators, governments, sports bodies, and industry stakeholders to act on four urgent concerns:

The report states: “Prediction markets offering sport-event and lottery based contracts without a proper local license, operate in breach of applicable gaming licensing requirements and, internationally, outside the framework established by the Macolin Convention on the Manipulation of Sports Competitions that also is the basis for the definition of illegal activities in the lottery sector.

“The absence of monitoring, suspicious transaction reporting, and insider trading prohibitions creates a direct route for corrupt actors to monetise manipulated outcomes,” it added. “In contrast to licensed lottery and betting operators, prediction market platforms are not subject to regulatory requirements on player protection, such as age verification, self-exclusion mechanisms, spending limits, or the provision of responsible gambling support.

“Licensed operators bear the full cost of compliance, taxation, and public good contributions. Unregulated prediction market operators bear none of these costs while competing for thesame customers.”