Germany Rules Out Prediction Market Licenses

Prediction markets face a difficult regulatory position in Germany, where contracts based on political and other non-sporting events cannot receive gambling licenses. The issue affects platforms such as Kalshi and Polymarket, which offer event contracts settled through code and funded with stablecoins.

For operators considering European expansion, Germany presents a different obstacle from markets where licenses exist. Spain blocked Polymarket and Kalshi in May because neither held a Spanish license, while Germany provides no application route for these wagers.

German Rules Focus on the Event

The Gemeinsame Glücksspielbehörde der Länder (GGL), Germany’s joint gambling authority for its 16 federal states, addressed prediction markets in a warning published on 5 September 2025. The notice named Polymarket and discussed wagers concerning the war in Ukraine.

Under the 2021 State Treaty on Gambling, bets involving political elections, court decisions, natural disasters and similar non-sporting events cannot receive a German license. The framework covers sports betting with verifiable results, leaving other event contracts outside the licensed market.

The GGL stated that organizing, brokering, advertising and participating in such bets can lead to penalties, extending regulatory exposure beyond operators to users and marketing partners.

Crypto settlement adds another enforcement challenge. Traditional measures can target companies, domains, payment providers and other intermediaries. Stablecoins can reduce reliance on banks and card networks, while deployed contracts have no registered office.

Germany has concentrated on distribution and access through advertising, payment processing, affiliates and a public list of authorized gambling websites. Enforcement has limits. In March 2025, the Federal Administrative Court ruled against the GGL, finding that the existing treaty lacked sufficient authority to require internet access resellers to block gambling websites. The regulator has since focused on hosting providers and sought broader powers.

Compliance Creates Technical Obstacles

Research commissioned by the GGL and conducted by the Blockchain Research Lab estimated Germany’s online gambling channelization rate at 77.03%. Unlicensed platforms generated an estimated €547 million in gross revenue during 2024, compared with €466 million in 2023, representing about 22.4% of total stakes.

A prediction market seeking authorization would face requirements designed around conventional gambling. Deposits are capped at €1,000 per month across licensed sites. Operators must verify users are at least 18, check the OASIS self-exclusion register and provide the BZgA helpline. Online slots face a €1 stake limit and a five-second interval between spins. Live dealer games require state-level licensing, with Bavaria currently offering them. The gambling tax stands at 5.3% of each stake.

These requirements create problems for blockchain-based platforms. A shared deposit ceiling requires operators to track customer activity across licensed sites, while cryptocurrency wallets do not inherently provide that information. Self-exclusion presents another difficulty because conventional operators can stop a wager before funds move.

An on-chain system could place checks at the interface, although users could bypass them by interacting directly with a contract. Embedding the requirement into the contract would require wallet whitelisting against a national register, creating a permissioned structure unlike the open design commonly used by these platforms.

Germany’s 2026 review of the State Treaty could determine whether event contracts receive a distinct regulatory category or remain outside the licensed market.

Source:

“Can Prediction Markets Get Licensed in Germany?”, thecoinrepublic.com, Aug 3, 2026