Polymarket is lobbying regulators in Europe and the UK to be regulated as a financial services firm rather than a gambling operator. The New York-based platform has been meeting with watchdogs in London, Brussels and across the EU to argue its contracts should fall under financial services rules instead of national gambling laws.
The company lets users trade contracts on event outcomes, from sports and elections to central bank decisions and weather. In the US, the Commodity Futures Trading Commission treats it as derivatives. But Europe bans prediction markets for retail investors, blocking expansion. Polymarket has been talking to the European Securities and Markets Authority and the European Commission while pursuing licences in individual member states.
The platform, raising funds at a valuation above $20 billion, wants its contracts governed by the MiFID directive for financial instruments rather than betting laws. In June, Polymarket's legal team met with ESMA chair Verena Ross, and the next day with FCA chief executive Nikhil Rathi. In October the company joined Blockchain For Europe.
The FCA is studying possible reform of access rules for prediction markets but considers the retail ban on binary options justified due to their speculative nature and consumer risk. The regulator believes markets on financial events fall under its mandate, while political and sports markets belong to the Gambling Commission. Sports and politics generate most of the revenue at Polymarket and rival Kalshi.
Authorities in the UK, France, Germany and Italy have stated that prediction market operators need gambling licences. ESMA warned against loosening EU rules in October, calling such platforms a breeding ground for insider trading.
