Polymarket is lobbying European regulators to classify its prediction-market contracts as financial products rather than gambling, as the company seeks to expand its operations across Europe.
According to the Financial Times, Polymarket has held discussions with regulators in London, Brussels and other European capitals. The company is seeking a regulatory framework that would allow its contracts to operate under financial-services rules, including the EU’s Markets in Financial Instruments Directive (MiFID), rather than separate national gambling regimes.
Polymarket Engages European Regulators
Polymarket has reportedly met officials from the European Securities and Markets Authority (ESMA), the European Commission and regulators in individual EU member states.
The company argues that its event contracts resemble financial derivatives rather than conventional bets. The approach follows the regulatory treatment of some prediction markets in the United States, although US regulators and individual states have also disagreed over their classification.
Polymarket has also joined Blockchain For Europe and is engaging with industry groups as it seeks to build support for its proposed regulatory approach.
European Regulators Take Different Positions
European regulators have so far maintained significant restrictions around prediction markets.
ESMA said in July that event contracts may qualify as financial instruments depending on the underlying event. Where they do, the contracts can fall under existing national measures covering binary options, including restrictions on their marketing, distribution or sale to retail clients. ESMA also said providers distributing event contracts that qualify as financial instruments require authorisation as investment firms.
The UK Financial Conduct Authority has similarly maintained restrictions on binary options while distinguishing between financial event contracts and markets based on outcomes such as politics or sports.
Regulatory Classification Remains Unresolved
The different approaches leave prediction-market operators facing a complex European regulatory environment.
Polymarket’s European expansion strategy therefore depends partly on whether regulators accept its argument that certain contracts should fall within financial-services regulation rather than national gambling frameworks.
ESMA has continued to highlight investor-protection and market-integrity concerns surrounding prediction markets. Its recent risk assessment also examined the growth of the sector, while the regulator has warned firms to assess whether event contracts fall within existing financial-market rules.
For Polymarket, securing regulatory clarity would provide a potential route into regulated European markets. For regulators, the debate centres on how prediction markets should be classified and which investor-protection and market-integrity requirements should apply.
