Polymarket is intensifying its campaign to be recognized as a financial services entity in Europe, rather than a gambling operator. The prediction markets platform is actively engaging with European regulators in an effort to access markets where prediction markets are currently restricted or prohibited.
As reported by The Financial Times, Polymarket is in discussions with regulators in the UK and across the European Union, as well as with the European Securities and Markets Authority (ESMA) and the European Commission. The organization is advocating for its classification under the European Union's Markets in Financial Instruments Directive (MiFID), which governs financial instruments.
Currently, prediction markets are largely inaccessible to European retail customers due to existing regulations. In June, a coalition of nine European gambling regulators launched a joint initiative targeting unlicensed prediction market platforms operating across Europe. This group included France’s l’Autorité Nationale des Jeux, which banned Polymarket in 2024 after determining its operations could represent unlicensed gambling.
In Italy, Polymarket faced further setbacks when it and Serie A football club Lazio mutually terminated a sponsorship deal after the Italian gambling regulator identified Polymarket as a prohibited site.
If Polymarket's lobbying efforts are successful, it may pave a clearer path for the company to operate in Europe beyond Gibraltar, which became the first licensing area to implement a dedicated regulatory framework for prediction markets earlier this year.
Regulatory hurdles remain significant for Polymarket. In July, the ESMA stated that prediction markets offering binary yes-or-no outcomes and fixed payouts are classified as restricted financial instruments. During its first discussion on prediction markets, the ESMA clarified that contracts linked to equities, indices, interest rates, currencies, or commodities would be categorized as financial instruments and treated as derivatives, according to Annex I of the MiFID II regulation.
In the United States, the Commodity Futures Trading Commission classifies prediction markets as financial derivatives, a stance that has faced opposition from several states aiming to regulate companies like Polymarket and Kalshi under gambling laws. Meanwhile, the UK's Financial Conduct Authority (FCA) indicated that contracts concerning “financial or certain climatic events” fall within its jurisdiction, whereas non-financial events, including sports and political outcomes, should be governed by the Gambling Commission. The FCA stated, “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 create a regulatory framework for blockchain innovations in Europe.
