Polymarket Urges EU Regulators to Treat Prediction Markets as Financial Products

^{Shayne Coplan, CEO of Polymarket}

Polymarket is lobbying in Europe for prediction markets to be regulated under financial rules rather than gambling laws. The company has already discussed the issue with regulators in the EU and the UK, the Financial Times reports.

Polymarket representatives have held meetings in London, Brussels, and several EU countries. The company has been in contact with the European Securities and Markets Authority (ESMA), the European Commission, and the UK’s Financial Conduct Authority (FCA). FCA chief executive Nikhil Rathi was among those approached.

Polymarket is seeking recognition of the contracts traded on its platform as financial instruments. If successful, they would fall under the EU’s Markets in Financial Instruments Directive (MiFID) rather than national gambling legislation.

The issue is particularly important for the company because the EU currently has no unified regulatory framework for prediction markets.

If a contract is classified as a financial instrument, it is subject to EU financial market rules. If it is considered a form of gambling, the requirements are determined by the legislation of each individual country.

However, moving under financial regulation would not remove all restrictions. ESMA has indicated that some event-based contracts may fall under rules governing binary options. Such products cannot be offered or sold to retail clients — customers without professional status in financial markets.

Polymarket has already faced gambling regulation challenges in France. In July, local internet providers were ordered to block access to the platform over alleged non-compliance with gambling laws. Polymarket later said it intended to challenge the decision.

At the same time, the company is expanding its ties with the European industry. In September, Polymarket joined Blockchain for Europe, a Brussels-based industry association representing blockchain companies. The organisation works with policymakers, experts, and market participants on the regulation of blockchain technologies and digital assets in Europe.