Prediction markets have been a big piece of the conversations throughout NEXT.io Malta this week. However, one panel highlighted just how differently the industry is being viewed depending on which side of the Atlantic you are standing.
During the session "Prediction Markets vs. Traditional Betting: Will North America Rewrite the Rules?", legal experts Ron Segev, Luis Portela de Carvalho, and Quirino Mancini debated whether prediction markets represent genuine innovation or simply a regulatory challenge that lawmakers have yet to fully solve. What quickly became clear is that Europe and North America are approaching the same product from very different directions.
North America's Growth Story Continues to Surprise
One of the strongest defenses of prediction markets came from Ron Segev, who argued that many observers should not be shocked by the industry's explosive growth over the last two years. According to Segev, prediction markets benefited from something traditional sports-focused operators never had: immediate federal reach. Instead of expanding state by state, platforms like Kalshi suddenly operated under a framework that enabled them to scale nationally.
He also pointed to distribution as a major factor. Prediction markets are increasingly appearing alongside existing trading and investment products, creating exposure to entirely new audiences. Segev compared that growth to a forest fire, suggesting that once awareness spreads, adoption can happen remarkably fast.
Institutional participation was another major topic. Segev noted that a significant portion of the volume comes from professional traders and firms rather than purely retail participants, which helps explain the massive numbers being reported across the industry.
Europe Still Wants Regulatory Clarity
While Segev focused heavily on growth, Luis Portela de Carvalho repeatedly returned to one central issue: regulation. From his perspective, Europe still lacks a clear answer to a fundamental question. Are prediction markets financial products or consumer-facing gaming products?
He pointed to recent developments involving Polymarket's partnership with the Italian football league as an example of why regulators may eventually be forced to make a decision. If prediction market operators are allowed to offer products that licensed European operators cannot, regulators will likely face increasing pressure to clarify where these platforms fit.
Throughout the discussion, Carvalho stressed that the current gray area cannot remain indefinitely. Businesses, consumers, and regulators all need a clearer framework moving forward.
Concerns Around Consumer Outcomes
Quirino Mancini introduced another perspective that sparked discussion among attendees. Citing recently published data tied to Polymarket activity, Mancini highlighted reports suggesting that a large share of profits is concentrated among a very small number of users. His concern was not necessarily that prediction markets should disappear. Rather, regulators may need to examine whether current market structures create an uneven playing field.
Segev acknowledged similar concerns while arguing that the discussion should focus on proper oversight rather than outright opposition. He repeatedly emphasized that prediction markets are not inherently problematic but likely require stronger regulatory frameworks as the industry matures. Several comparisons were also made to insurance products, financial trading markets, and other regulated industries that already operate under extensive consumer protection rules.
Entertainment Product or Financial Instrument?
One of the more interesting audience questions centered on how prediction markets should ultimately be categorized.
Carvalho argued that many of the contracts currently offered would likely be viewed similarly to traditional sports-related products under Italian regulatory law. Segev responded that Canadian regulators often treat similar products differently, sometimes viewing them as novelty-style bets. That exchange perfectly captured the session's broader theme. There is still no universal agreement on what prediction markets actually are.
The Trade Handle Prediction Markets Take
Nobody on stage questioned whether the industry is growing. The disagreement centered on how it should be regulated and what framework makes the most sense moving forward. Europe appears focused on defining exactly what prediction markets are before embracing them. While the United States has largely allowed innovation to move first and regulation to follow.
From our perspective, the most interesting part of the discussion was how often growth, adoption, and institutional participation kept coming up. Even critics of prediction markets largely acknowledged that the category is attracting enormous attention. The next chapter may not be about whether prediction markets survive, but rather which regulatory model ultimately wins out.