Germany Maintains Ban on Prediction Market Licensing

Germany continues to keep prediction markets outside its regulated gambling sector, leaving platforms such as Kalshi and Polymarket without a path to obtain a local gambling license. 

While these services allow users to trade contracts tied to real-world events through stablecoins and blockchain wallets, German law still treats many of those markets as incompatible with the country's existing gambling rules.

The issue came into sharper focus after German regulators addressed the status of these products on September 5, 2025. The Gemeinsame Glücksspielbehörde der Länder (GGL), the country's joint gambling authority, published a warning concerning wagers linked to public events. The notice specifically mentioned Polymarket and referred to contracts connected with the war in Ukraine.

German Gambling Law Leaves No Licensing Path

Germany's current position comes from the 2021 State Treaty on Gambling, an agreement signed by all 16 federal states in October 2020. Under those rules, betting on political elections, court rulings, natural disasters, and similar non-sporting events cannot qualify for a German gambling license.

Licensed sports betting remains possible because operators can verify results through official sporting outcomes. Event contracts tied to political developments, elections, or legal decisions do not fit within the existing licensing framework.

The GGL also warned that legal consequences may extend beyond companies operating these platforms. According to the authority, organizing, brokering, advertising, and even participating in these wagers may result in penalties. That position places potential legal risk on users as well as affiliates and promotional partners involved with these services.

Germany's legal approach differs from developments in the United States. In July, a federal judge blocked Minnesota's attempt to prohibit prediction markets after concluding that federal commodities law likely overrode parts of the state's restrictions. Germany has no equivalent federal preemption principle that would create a similar route around its gambling legislation.

Crypto-Based Platforms Present Enforcement Challenges

Prediction markets that operate through blockchain technology create additional compliance issues for regulators. Many platforms settle contracts with stablecoins rather than traditional payment methods, while smart contracts execute automatically on blockchain networks. Those systems also lack a conventional registered office, making direct enforcement more difficult.

As a result, German authorities have focused their attention on identifiable parts of the distribution chain. Enforcement efforts have included websites, hosting providers, advertising services, affiliates, and payment providers connected to unlicensed gambling activity.

The GGL has also encountered legal limits when attempting to block access to gambling websites. In March 2025, Germany's Federal Administrative Court ruled that the State Treaty on Gambling did not provide sufficient legal authority for the regulator to require internet access resellers to block gambling websites. Following that decision, the authority shifted more attention toward hosting providers while also seeking broader enforcement powers.

Research commissioned by the GGL and carried out by the Blockchain Research Lab estimated Germany's channelization rate at 77.03%. The same research found that unlicensed gambling operators generated around €547 million in gross revenue during 2024, up from €466 million in 2023. Those figures represented roughly 22.4% of all gambling stakes.

Existing Requirements Remain Difficult for Blockchain Markets

Current German gambling rules would also create practical obstacles if lawmakers eventually introduced a licensing category for prediction markets.

Licensed gambling operators must enforce a monthly deposit limit of €1,000 across all licensed platforms. Customers must be at least 18 years old, while operators must verify players against the national OASIS self-exclusion register before allowing gambling activity. Germany also applies a 5.3% tax to every stake placed.

Those requirements do not fit easily with blockchain-based systems. Wallets do not provide centralized transaction histories that allow operators to monitor deposits across multiple services. Self-exclusion also presents difficulties because blockchain transactions execute automatically once users submit them.

One possible solution would involve carrying out compliance checks through a user interface before access to the contracts. Even then, users could potentially bypass those controls by interacting directly with the underlying smart contract.

Another option would require smart contracts to verify wallet approval against a national register before allowing trading activity, although that approach would significantly change the open design used by many blockchain-based prediction markets.

Germany is expected to review the State Treaty on Gambling during 2026. That process could examine whether regulators should receive additional enforcement powers and whether event contracts deserve their own regulatory category.

Until any changes are made, prediction markets covering political, legal, and similar public events remain outside Germany's gambling licensing system.

Source:

Germany Keeps Prediction Markets Outside Licensing Framework, realmoneyaction.com, August 5, 2026.