Regulatory uncertainty is delaying prediction market M&A, with gaming investors waiting for clearer rules before pricing deals. The issue was discussed during NEXT Summit Valletta 2026 as prediction markets became one of the main topics across investment and product panels.
Speakers pointed to legal disputes in the U.S., state challenges and unclear classification as key risks for buyers. Those issues make it harder to value prediction market companies and related suppliers.
Investors want clearer rules
Prediction markets have grown quickly as platforms such as Kalshi and Polymarket move further into sports, politics and other event-based contracts. That growth has created interest from gaming operators, investors and technology suppliers.
The problem is that legal treatment remains unclear in several markets. Some regulators view sports event contracts as gambling, while prediction market operators present them as federally regulated financial products.
That split affects deal talks. Buyers need to know whether a target can keep operating in key states, whether sports markets will remain available and whether extra licences will be required.
U.S. disputes shape valuation
The U.S. remains central to the prediction market debate because Kalshi is regulated by the Commodity Futures Trading Commission. State regulators and attorneys general have challenged sports-related contracts, arguing that they resemble sports betting.
Court rulings have not created a settled national position. Some decisions have supported Kalshi’s federal pre-emption argument, while other cases and state bills continue to create uncertainty. That mixed picture can reduce buyer confidence. It also makes earn-outs, risk clauses and jurisdiction-by-jurisdiction assumptions more important in any prediction market deal.
Gaming M&A now favours regulated revenue
The wider NEXT Valletta investment discussion showed a shift in gaming M&A. Investors now value regulated revenue, local licences and market spread more than fast expansion alone. That approach affects prediction markets directly. A platform with strong volume may still face questions if its revenue depends on products that could be restricted by courts, regulators or lawmakers.
Operators looking at the sector may prefer partnerships, data deals or minority investments before full acquisitions. Those options give companies access to prediction markets without taking on all regulatory risk.
Malta keeps watching the sector
Malta has been exploring whether prediction markets need a dedicated regulatory framework. The country already hosts a large online gaming sector and has been studying how event contracts could fit into existing or new rules.
That work is relevant for Europe-facing operators. A clearer Maltese route could give prediction market companies another licensing option, especially if U.S. legal disputes continue to slow larger transactions.
