Polymarket is intensifying its campaign to be recognized as a financial services company in Europe, rather than merely a gambling operator. The prediction markets platform is actively lobbying European regulators to ease its entry into markets where such platforms are currently limited or prohibited.
In its efforts, Polymarket is meeting with regulators throughout the UK and the European Union, and is also engaging with both the European Securities and Markets Authority (ESMA) and the European Commission.
The company aims to convince European authorities that its operations should be classified under the European Union’s Markets in Financial Instruments Directive (MiFID), which governs financial instruments.
Currently, prediction markets face significant restrictions in Europe, particularly for retail customers. Back in June, nine European gambling regulators initiated a collaborative effort targeting unlicensed prediction market platforms within their jurisdictions. This coalition included France’s l’Autorité Nationale des Jeux, which prohibited Polymarket in 2024, determining that its offerings could be considered unauthorized gambling activities.
In Italy, Polymarket found itself compelled to terminate a sponsorship deal with Serie A football club Lazio after being flagged as a prohibited site by the national gambling regulator.
If Polymarket's lobbying proves successful, it may establish a more defined route into European markets, especially considering Gibraltar, which recently set a regulatory framework dedicated to prediction markets.
Regulatory challenges continue for Polymarket, as in July, the ESMA classified prediction markets that provide binary yes-or-no outcomes with fixed payouts as restricted financial instruments. This was the first time the ESMA addressed prediction markets, affirming that specific contracts associated with equities, indices, interest rates, currencies, or commodities qualify as financial instruments, designating them as derivatives.
In the United States, the Commodity Futures Trading Commission oversees prediction markets under financial derivatives regulations, although this classification has faced pushback from multiple states aiming to regulate such operators under gambling laws. Conversely, the UK’s Financial Conduct Authority (FCA) indicated in its FCA Perimeter Report that contracts related to "financial or certain climatic events" fall under its jurisdiction, while contracts related to non-financial events, such as sports or political conclusions, should be regulated by the Gambling Commission. The FCA commented, "We will consider whether we want to do further work on access to these products, and/or clarify the perimeter."
Earlier this month, Polymarket became a member of Blockchain for Europe, an organization dedicated to collaborating with policymakers to shape regulatory frameworks for blockchain-driven innovations across Europe.
