Polymarket is intensifying its efforts to be recognized as a financial services entity across Europe rather than being categorized as a gambling operator.
The prediction markets platform is actively lobbying European regulators, according to The Financial Times, aiming to expand into markets where such platforms face restrictions or outright bans. Meetings with regulators in the United Kingdom and the European Union have been held, alongside discussions with the European Securities and Markets Authority (ESMA) and the European Commission.
Polymarket is advocating for its inclusion under the European Union’s Markets in Financial Instruments Directive (MiFID), which governs financial instruments.
As it stands, prediction markets are largely inaccessible to retail customers in Europe due to existing regulations. In a notable move in June, nine European gambling authorities announced a joint strategy targeting unlicensed prediction market platforms throughout the region. Among these was France’s Autorité Nationale des Jeux, which banned Polymarket in 2024 after determining that its services were akin to unlicensed gambling.
Furthermore, Polymarket’s sponsorship agreement with Serie A football club Lazio was mutually terminated after the Italian gambling regulator listed the platform as prohibited.
If Polymarket succeeds in its lobbying, it could pave a clearer path for operating in Europe beyond Gibraltar, which this year became the first region to implement a regulatory framework specifically for prediction markets.
In July, the ESMA confirmed that prediction markets characterized by binary outcomes and fixed payouts are classified as restricted financial instruments. This was the first time the ESMA had discussed prediction markets, concluding that certain contracts related to equities, indices, interest rates, currencies, or commodities qualify as financial instruments and should thus be treated as derivatives under Annex I of the MiFID II regulation.
In the United States, the Commodity Futures Trading Commission currently regulates prediction markets as financial derivatives, although this stance has been met with resistance from several states seeking to classify operators like Polymarket and Kalshi under gambling laws. Conversely, in the UK, the Financial Conduct Authority (FCA) noted in its FCA Perimeter Report that contracts associated with “financial or certain climatic events” fall under its jurisdiction, while those linked to non-financial outcomes, such as sporting events or political scenarios, should be regulated 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 that collaborates with policymakers to create a regulatory framework for blockchain-based innovations across Europe.
