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Polymarket Seeks Financial Regulation Route into UK and EU Markets

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Altay
Altay Celikkaya
Content Manager
Updated:
Reading Time: 3 minutes

Polymarket is reportedly stepping up efforts to enter the UK and European Union by seeking to have its event contracts treated as financial products rather than gambling.

The Financial Times reported on 22 September that the prediction market operator is engaging with regulators in London, Brussels and across the EU as it explores a route into the region. No UK or EU regulator has approved Polymarket to operate under a financial services framework.

The move shifts the focus from the broader debate over prediction-market classification to how Polymarket is responding to an increasingly complex European regulatory environment.

Polymarket smartphone graphic with UK and EU flags highlighting the company’s push for financial regulation in European markets.

Regulation & Compliance

Key Takeaways for Prediction Market Operators

  • Polymarket is reportedly seeking financial services treatment for its event contracts in the UK and EU

  • The company has held discussions with European and UK regulatory authorities

  • ESMA says the classification of event contracts depends on the underlying event and product structure

  • Financial classification would not automatically allow retail distribution across Europe

  • National gambling laws may still apply to some event contracts

Polymarket Targets Financial Services Framework

According to the Financial Times, Polymarket is making the case that its event contracts should be regulated under financial services rules, including the EU’s MiFID framework, rather than a country-by-country combination of gambling laws.

The reported lobbying push follows Polymarket’s September move to join Blockchain for Europe, a Brussels-based trade association. In its announcement, the company said it was expanding its European presence and intended to participate in discussions covering digital asset regulation, consumer protection and market integrity.

Polymarket Chief Legal Officer Neal Kumar said:

Europe has the opportunity to set global standards for how prediction markets are regulated.

The company has already encountered a different interpretation from gambling authorities in several European jurisdictions. In July, Polymarket launched a legal challenge against a French website-blocking order after the ANJ treated the platform as an unauthorised gambling operator. The dispute highlighted Polymarket’s regulatory challenge in France and the wider disagreement over where event-contract platforms sit within existing legal frameworks.

ESMA Position Limits a Simple Financial Route

Polymarket’s strategy does not mean financial classification would automatically provide unrestricted access to European consumers.

ESMA’s official guidance on prediction markets states that whether an event contract qualifies as a financial instrument depends on the event question. Where a contract is considered a financial instrument, it may be classified as a derivative and become subject to existing restrictions on binary options.

ESMA also says event contracts can simultaneously qualify as bets under national gambling legislation. Firms distributing event contracts that qualify as financial instruments in the EU require investment firm authorisation, even when products are not offered to retail customers.

That position builds on ESMA’s recent scrutiny of prediction-market risks, including concerns around insider trading, market manipulation and retail exposure.

European Gambling Regulators Remain Cautious

Financial regulation is only one side of the European debate.

Nine European gambling regulators previously issued a joint warning on prediction markets, saying platforms may fall under national gambling laws when consumers stake money on sporting, political, financial or other outcomes.

That creates a potentially fragmented route to market. Contracts linked to certain financial events could fall within financial regulation, while sports or political event markets could still attract scrutiny from gambling authorities.

For Polymarket, the current discussions therefore represent an attempt to establish a regulatory route rather than confirmation that one has been secured. The next significant development will be whether regulators formally accept any part of the company’s financial-services argument and what that would mean for individual event contracts and retail access across Europe.