European Lotteries (EL), representing state and licensed national lottery organizations throughout Europe, is advocating for a unified regulatory framework for prediction markets. This call to action was made public in a press release on September 30, where EL noted the swift growth of these products and the potential risks they pose to consumers and current regulatory frameworks.
The association raised concerns that the soaring popularity of prediction market products— which enable users to bet on outcomes like elections via ‘event contracts,’ offering binary payouts based on future events—could open up regulatory loopholes. EL warned that without timely adaptations by regulators, these developments might erode consumer protections.
Piet Van Baeveghem, secretary general of EL, stressed the necessity for regulation to keep pace with market changes. He stated, “Prediction markets are developing rapidly, and regulation should keep pace. EL’s position is simple: activities that present similar risks should be subject to similar safeguards. The focus should be on the nature of the product and activity, rather than the label or underlying technology attached to it.”
The organization argued that regulatory frameworks should be determined based on the legal characteristics of products, rather than on specific terminology or technological features. It also underscored the importance of technology neutrality, asserting that advancements such as distributed ledgers and smart contracts should not influence the overarching regulatory approach.
Under the current EU regulatory structure, event contracts categorized as financial instruments fall under the MiFID II financial services regulations. Meanwhile, those that do not qualify are subject to national gambling laws. EL noted that being classified as a financial instrument does not exempt a product from relevant national gambling legislation, resulting in a fragmented regulatory environment.
The organization expressed support for the European Securities and Markets Authority’s (ESMA) recent acknowledgment that some event contracts might be subject to national gambling regulations. In a July statement, ESMA indicated that prediction markets featuring binary outcomes and fixed payouts might be classified as restricted financial instruments, leaving room for certain event contracts to be included under gambling regulation in Europe. Products deemed non-financial might fall under the forthcoming EU Markets in Crypto-Assets (MiCA) regulations. EL stated that this recognition emphasizes the need for collaboration between financial and gambling authorities to achieve a cohesive regulatory strategy.
EL raised concerns regarding the fragmented regulation across the EU. Since gambling regulation is primarily a national responsibility within the EU, differing legal regimes, public policy priorities, and market structures among member states pose significant challenges for oversight and enforcement. The organization stressed the necessity for regulatory coherence and effective coordination among national authorities.
Countries such as France, the Netherlands, and Spain have implemented restrictions or bans on prediction market platforms like Polymarket and Kalshi. Earlier this year, nine European regulators launched a collaborative initiative aimed at unlicensed prediction market platforms across Europe, primarily due to concerns about consumer risks associated with platforms that offer 24/7 accessibility without required betting limits or cooling-off periods. In contrast, the Gibraltar government released regulations this summer under its Gambling Act 2025, designating prediction markets as a unique licensable category.
