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Instead, it proposed a risk-based approach. It suggested lighter controls on use cases such as coding assistants, but strong checks on customer-facing functions, particularly those involving fraud and responsible gambling.

Kenneth Brincat, CEO of the MDIA, said companies needed “practical ways” to better understand where AI fits within their businesses.

“Trust is fundamental to the responsible adoption of AI. As its use becomes increasingly embedded across the gaming sector, organisations need practical ways to understand where AI is being used, manage the associated risks and ensure that accountability and human oversight remain firmly in place,” he said.

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“We expect non-sports categories such as economics, politics, crypto, and entertainment to gain share over time,” says the analyst.

Prediction market operators are on legal losing streaks, confirming that Beynon is onto something when he says the regulatory environment is the biggest risk facing the industry.

“We continue to view regulation as the largest risk to prediction markets,” says the analyst. “While industry growth remains robust, adverse legal outcomes could materially impact sports contract availability and long-term adoption.”

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