How to Set Up a Prediction Market Company in 2026 — Complete Licensing, Technology & Banking Guide

1. The $44 Billion Wake-Up Call

The numbers no longer require explanation — they speak for themselves. In 2025, Kalshi recorded $43.1 billion in notional trading volume, a 2,100% increase from the year before. Polymarket processed $33.4 billion, making the two platforms' combined 2025 volume more than $76 billion. For context, that's a market that barely existed in any structured form five years ago.

The 2024 US presidential election was the inflection point — millions of users discovered that prediction markets were more accurate, more real-time, and more intellectually engaging than polls. Then the sports flywheel kicked in. Then the institutional money arrived.

In October 2025, Intercontinental Exchange — the parent company of the New York Stock Exchange — announced a $2 billion commitment to Polymarket, valuing it at $9 billion and acquiring exclusive global distribution rights to its event-driven data. By March 2026, ICE completed the full commitment with a final $600 million tranche. In February 2026, ICE launched its Polymarket Signals and Sentiment tool for institutional clients — prediction market data is now on the same terminals used by hedge fund managers and central banks.

Meanwhile, Kalshi raised $1 billion at a $22 billion valuation in March 2026, doubling its December 2025 valuation in three months. On Super Bowl Sunday in February 2026, Kalshi processed $871 million in a single day, with total game-related markets exceeding $1 billion.

Analysts at Citizens estimate the industry's annual revenue run rate is now around $2 billion. Devin Ryan's team projects it could quadruple. Bank of America published a report on April 9, 2026 confirming weekly prediction market volume was up 4% week-over-week, with Kalshi commanding 89% of the US regulated market. The irony? The same week these numbers came out, three US states were trying to ban Kalshi. The regulatory battlefield is real — but so is the commercial opportunity.

2. Kalshi, Robinhood, Polymarket: The Partnerships Reshaping the Industry

As the first federally regulated prediction market exchange in the United States, Kalshi has redefined how traders interact with real-world events by offering Event Contracts — tradable positions linked to geopolitical, economic, and social outcomes. What began as a niche concept has now become a global benchmark, with major platforms such as Robinhood and Webull integrating Kalshi's market infrastructure directly into their trading ecosystems. At Zitadelle AG, we are already seeing a wave of interest from European brokers, offshore platforms, and fintech founders seeking licensing pathways, regulatory structuring, and technology frameworks to build Kalshi-style platforms internationally.

Robinhood's trajectory tells the story best. The platform launched a dedicated Prediction Markets Hub in early 2026 and saw its stock rally more than 200% in 2025 — analysts at Citizens estimate prediction markets now account for roughly 10% of Robinhood's revenue. But Robinhood didn't stop at distribution: in late 2025 it announced the acquisition of MIAXdx, a CFTC-registered designated contract market and clearing organization, in a joint venture with Susquehanna. That acquisition — expected to close Q1 2026 — effectively makes Robinhood a prediction market exchange operator in its own right, not just a broker.

Kalshi had 20 brokers in its distribution pipeline as of late 2025. Webull already brokers Kalshi contracts. Coinbase was reportedly in the pipeline. DraftKings acquired the Railbird exchange. FanDuel partnered with CME Group. The NHL became the first major US sports league to license its trademarks to prediction markets — partnering with both Kalshi and Polymarket. Then MLB and MLS joined.

Meanwhile, Gibraltar-licensed Predict Street became the first prediction market licensed in Europe and is FIFA's official prediction market partner for the 2026 World Cup. The international race is on.

3. The Regulatory Battlefield: Finance vs. Gambling vs. Something Else

A federal appeals court in New Jersey ruled in October 2024 that the CFTC had exceeded its authority by blocking Kalshi's election contracts. That ruling opened the door for political betting in the US. But the real regulatory story is messier.

As of April 2026, at least 10 US states have introduced legislation to explicitly ban political prediction markets or event contracts. Georgia passed HB 1 in February 2026 making it a felony to bet on political races. Montana and New Jersey have pending bills. The American Gaming Association is lobbying hard — and not in favor of prediction markets. The AGA sees Kalshi as an unlicensed threat to state-regulated sports betting monopolies.

Meanwhile, the CFTC itself is in flux. The agency's acting chair initially supported broader event contract approval, but political pressure has created a more cautious stance. The core legal question remains unresolved: are prediction markets derivatives, gambling, or a novel third category?

For international operators, the regulatory clarity offshore is paradoxically greater than in the US itself. Gibraltar, Malta, and Curaçao have established frameworks. The Cayman Islands allows unlicensed operation for non-US, non-Cayman residents. And EU regulators are still watching — MiCA doesn't cover prediction markets directly, but national gambling regulators do.

4. Technical Architecture: What You Actually Need to Build

A prediction market platform requires five core components:

• Order Matching Engine: The heart of the exchange — matches buy and sell orders for event contracts in real-time.
• Market Maker / AMM System: Automated market makers provide liquidity and continuous pricing. Polymarket uses an AMM; Kalshi uses a central limit order book with designated market makers.
• Liquidity Pool Management: Seed capital, liquidity provider incentives, and risk management tools.
• Settlement and Clearing: Determines outcomes, settles contracts, manages margin and collateral. Requires trusted oracles or official data feeds.
• Compliance and KYC/AML: Identity verification, transaction monitoring, regulatory reporting. Varies by jurisdiction.

White-label platforms exist. Azuro, Thales, and several unnamed B2B providers offer turnkey prediction market infrastructure. Build vs. buy depends on your regulatory strategy and capital.

5. Licensing Options for International Operators

For operators targeting non-US markets, several licensing pathways exist:

United Kingdom (UKGC) — New in 2026

Versus launched June 2026as the first prediction market platform operating under UK Gambling Commission licensing — marking the UK's formal entry into regulated prediction markets.

The UKGC gambling license framework covers prediction markets as a form of fixed-odds betting and pool betting. Requirements include: ring-fenced client funds at UK-regulated financial institutions, mandatory responsible gambling features (daily deposit caps, behavioral check-ins), AML/KYC under UK Money Laundering Regulations, and UKGC operator licensing.

UK UKGC is the highest-consumer-protection framework available for prediction markets globally — and correspondingly has the highest compliance burden. Timeline: 12–18 months. Best for: platforms targeting UK and English-speaking retail markets that want maximum institutional and partner credibility.

Isle of Man (GSC)

The Isle of Man Gambling Supervision Commission provides an established iGaming license framework applicable to prediction market platforms. Popular with operators who want UK-adjacent credibility without the full UKGC compliance burden. Timeline: 6–12 months.

Multi-Tier Corporate Structure

The commercially correct structure for most international prediction market operators is not a single entity — it is a tiered group:

• IP and trademark holdco: Cayman Islands Exempted Company or BVI Business Company holding all intellectual property, software rights, and trademarks. Does not interface with users. Does not hold customer deposits. Zero tax.
• Licensed operating subsidiary: The entity holding the gambling or derivatives license — Gibraltar, Malta, Curaçao, or UKGC. Interfaces with users directly for the licensed jurisdiction. Holds its own banking relationships and AML/KYC programme.
• Payment processing entity: A separate EMI-licensed or PI-licensed company (Lithuania, Cyprus, or Mauritius) handling fiat payment flows — card acquiring, e-wallet deposits, withdrawals. Keeps payment services regulation separate from gambling regulation.

This three-tier structure ensures that a regulatory action in one jurisdiction does not collapse the entire group, that banking relationships are secured at the appropriate entity level, and that the IP is protected from operational risk.

Zitadelle AG designs and implements multi-tier prediction market corporate structures — holding company, licensed operator, and payment entity — as a coordinated engagement from our Limassol headquarters.

iGaming Licensing →Curaçao iGaming License →Malta MGA License →Gibraltar Gambling License →

6. Banking and Payment Processing for Prediction Market Platforms

Banking is consistently the most underestimated operational challenge for prediction market platform operators. The combination of gambling-adjacent classification, crypto payment functionality, and international user bases creates enhanced due diligence triggers at every major bank.

The banking challenge: Mainstream retail banks in most jurisdictions classify prediction market platforms as gambling or gaming — one of the highest-scrutiny categories for business banking. UK banks, EU banks, and US banks all apply enhanced due diligence to gambling-related merchants, with many declining outright.

What works:

• EU-licensed EMIs (Lithuania, Latvia): Multi-currency accounts accessible to licensed gambling operators. SEPA and SWIFT. Lithuania's Bank of Lithuania EMIs with gaming experience are the most accessible banking option for internationally-licensed prediction market operators. Zitadelle AG provides introductions to EMI banking partners experienced with prediction market platforms.
• Gibraltar-licensed banks: Prediction market operators licensed in Gibraltar (GRA) can access Gibraltar-registered banking relationships — smaller than EU banking but specifically comfortable with GRA-licensed gambling entities.
• Crypto-native settlement: Platforms using USDC, USDT, or other stablecoins for contract settlement bypass fiat banking entirely for user fund management — requiring only operational corporate banking rather than high-risk gambling merchant accounts. Polymarket's model is the reference implementation.
• Specialist high-risk PSPs: Card processing for prediction market platforms requires specialist payment processors — standard Stripe/PayPal is not available for gambling-classified merchants. Providers with gambling vertical experience (Paymentwall, Safecharge, Nuvei, Praxis Cashier) can process cards for licensed prediction market operators.

Zitadelle AG prepares banking KYC packages for prediction market platforms and provides introductions to banking and PSP partners with gambling-vertical experience.

Lithuania EMI License →Cyprus PI License →Banking for High-Risk Fintech →

7. Jurisdiction Comparison — Prediction Market Licensing Options 2026

Cayman Islands Company Formation →BVI Company Formation →Cyprus CIF License →MiCA CASP License →

8. How Zitadelle AG Helps Prediction Market Platform Founders

Zitadelle AG is actively working with prediction market platform founders, European broker groups looking to add event contract functionality, and crypto-native platforms seeking licensed structures. The wave of interest we referenced in April 2026 has only accelerated since.

• Licensing advisory and application management: Gibraltar (GRA), Malta (MGA), Curaçao (LOK framework), Isle of Man (GSC), and Cayman corporate structuring. Full application preparation, regulatory submission, and NCA correspondence management.
• Multi-tier corporate structure design: IP holdco (Cayman or BVI), licensed operator entity (Gibraltar/Malta/Curaçao), and payment processing entity (Lithuanian or Cypriot EMI/PI) — coordinated design and implementation.
• Banking and PSP introductions: EMI account introductions for operational and user fund banking. Specialist payment processor introductions for card acquiring. Crypto settlement infrastructure advisory for platforms using stablecoin settlement models.
• White-label technology sourcing: Introductions to B2B prediction market platform providers (Azuro, Thales, and others) — assessing vendor suitability against the regulatory framework of the target license jurisdiction.
• AML/KYC compliance framework: FATF-aligned AML programme tailored to prediction market platform risk — event contract manipulation risks, oracle manipulation typologies, geofencing for restricted jurisdictions, politically-exposed person screening for political event markets.
• Legal opinion: For banking partners, payment processors, liquidity providers, and technology vendors requiring formal confirmation of the platform's licensed status and permitted activities.
• Corporate structuring for existing broker groups: For CySEC CIF licensees, Curaçao iGaming operators, and other regulated firms looking to add prediction market functionality — structuring the add-on product within or alongside existing regulatory permissions.

Request a consultation →iGaming Licensing →Cyprus CIF License →Lithuania EMI License →

9. The Gossip Desk

A few items that didn't fit elsewhere but matter:

• Donald Trump Jr. is a paid adviser to Kalshi and an investor in Polymarket.
• The CEOs of Kalshi and Polymarket both invested in 5c(c) Capital, a $35 million VC fund targeting prediction market infrastructure startups.
• Robinhood's prediction markets revenue is now estimated at roughly 10% of total revenue.
• The NHL, MLB, and MLS have all licensed their trademarks to prediction market operators.
• Predict Street (Gibraltar) is FIFA's official prediction market partner for the 2026 World Cup.
• ICE's Polymarket data is now available on Bloomberg and Refinitiv terminals.

10. Why Move Now

The US market is consolidating fast. Kalshi, Robinhood, and the DraftKings/FanDuel axis will likely dominate domestically. But internationally, the field is wide open. European regulation is still forming. Asian markets are untapped. LatAm, Africa, and the Middle East have no established players.

The window to build — to get licensed, launch, and establish market position before the majors arrive — is 12-24 months. Maybe less. This is the moment.