Polymarket is in talks with European regulators to secure classification as a financial service rather than a gambling operator. According to the Financial Times, the company is meeting with UK and EU officials and has opened dialogue with the European Securities and Markets Authority (ESMA) and the European Commission.
The platform is seeking recognition under MiFID II, the directive governing financial instruments. Prediction markets are currently blocked for retail customers across most of Europe. In June, nine European gambling regulators announced joint action against unlicensed platforms of this kind.
France's ANJ blocked Polymarket in 2024, classifying its services as illegal gambling. In Italy, the company terminated a sponsorship deal with football club Lazio after being added to the country's blacklist.
The sole exception is Gibraltar, which this year became the first jurisdiction to create a regulatory framework for prediction markets. If the lobbying succeeds, Polymarket would gain a legal route into Europe.
In July, ESMA confirmed that binary contracts with fixed payouts qualify as financial instruments. Contracts tied to stocks, indices, currencies or commodities must be regulated as derivatives under MiFID II.
In the US, the Commodity Futures Trading Commission oversees prediction markets as financial derivatives, though several states are attempting to apply gambling law. The UK's FCA has said contracts on financial events fall within its remit, while sports or political contracts belong to the Gambling Commission.
In early October, Polymarket joined Blockchain for Europe, an association that works with European lawmakers on blockchain regulation.
