Event Contracts: A strategic opportunity to launching prediction markets
Prediction markets are moving rapidly into the mainstream. In the US, Kalshi has shown that event contracts can operate under a full CFTC exchange licence, while retail brokers and crypto platforms explore similar integrations. At the same time, enforcement cases against offshore venues highlight how quickly regulators act when these products lack a clear licence perimeter.
Against this backdrop, brokers, exchanges, and founders increasingly ask SALVUS how to launch a prediction market platform, and what to expect or do about their banking partners and regulators.
As with all things in our line of specialisation, there is no universal licence. Nevertheless, there is a structured way to approach this problem opportunity. With CNN and CNBC striking partnerships with Kalshi, it is a certainty that the world will become even more financialised, and the business model giants like Polymarket are not to be dismissed as fads, but as megatrends.
In this article, the SALVUS Regulatory Compliance team will explore the key regulatory, licensing, and structural considerations for launching a compliant prediction market platform:
1. Classify your product first
2. Four questions, (and four answers) that shape your path
3. Choosing a Jurisdiction Family
4. What a SALVUS Deployment Plan provides
5. How SALVUS supports operators
We regularly share bite-sized insights on LinkedIn such as those found in this article.
1. Classify your product first
Across the EU, APAC, and most global markets, prediction markets fall into one of three categories. We have built a Prediction Market Deployment Plan that engages us to present the feasible paths given your strategic direction or current positioning. For now, consider:
- Gambling / Betting: Event outcomes treated as wagers, requiring national betting or gambling licences.
- Financial Instruments / Derivatives: Event contracts treated as derivatives, with investment-firm or trading-venue licensing obligations.
- Information Protocol / Data: On-chain “neutral protocol” models, often offshore, which remain legally grey and prone to access restrictions.
Correct classification determines every subsequent regulatory and jurisdictional decision.
2. Four questions, (and four decisions) that shape your path
- Operating Model & Risk: Are you matching users directly, taking risk yourself, only providing the technology, or relying on market makers?
- Clients & Distribution: Are you D2C, B2B, or B2B2C? How much of your activity will be in the EU, APAC, or other regions?
- Fiat or Crypto Settlement: Your choice influences whether payment-services, e-money, or VASP obligations apply.
- On-Chain vs Off-Chain: On-chain settlement does not eliminate responsibility. It changes how governance and audit trails must be demonstrated.
3. Choosing a Jurisdiction Family
- United States: The most developed regulatory regime for event contracts (CFTC DCM). Typically, a second-stage project due to capital and legal complexity.
- Other tier 1 paths: Operators must align with national gambling frameworks or MiFID-driven financial markets rules in Europe. This route enables banking access and long-term credibility but requires more robust authorisation.
- Mid-Shore & Offshore Jurisdictions: Faster and more flexible but with limited Tier-1 banking, required geo-blocking, and potential reputational drawbacks. Useful as starting tools.
- The Myth of the “Unregulated” Model: Launching from a jurisdiction with no explicit rules is not a strategy. Banks, PSPs, and major economies increasingly require regulatory clarity and actively restrict offshore platforms. Any operator seeking institutional liquidity or acquisition potential must plan toward recognised licensing.
4. What a SALVUS Deployment Plan provides
SALVUS delivers a concise, decision-focused Prediction Market Deployment Plan that includes:
- Regulatory classification across key regions
- 2–3 concrete jurisdictional structures, with timelines and capital requirements
- High-level governance and compliance architecture
- A roadmap from incorporation to go-live
The goal is to give your board a clear and defensible path to launch.
5. How SALVUS supports operators
SALVUS specialises in licensing and ongoing compliance for investment firms, payment institutions, and crypto-asset providers. This is precisely the regulatory intersection where prediction markets sit.
Whether you are launching a new venue, embedding event contracts into an existing platform, or upgrading an offshore model into a bankable business, SALVUS can help you build a structure that stands up to regulatory and commercial scrutiny.
Contact us at info@salvusfunds.com if you would like more information about our Prediction Market Deployment Plan.
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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.