Polymarket wants financial rules, not gambling rules, in Europe
Polymarket has been speaking with regulators in the European Union and the United Kingdom about being treated as a financial services group rather than a gambling website. The discussions were reported on Sept. 22 by Engadget citing the Financial Times.
The New York-based prediction markets platform talked to the European Commission and the European Securities and Markets Authority (ESMA) in hopes of being regulated under MiFID rules, according to that reporting. In London, representatives met with Nikhil Rathi, chief executive of the UK Financial Conduct Authority (FCA).
The push is aimed at gambling law. Polymarket seeks financial-services classification to avoid gambling laws and to overturn its bans in Spain and France. Spain blocked Polymarket and Kalshi in May while investigating their legality to operate without a gambling license. France ordered internet service providers in July to block local access to Polymarket.
Under current rules, Polymarket is required to secure a gambling license in EU countries. In Europe, Polymarket and Kalshi remain largely unauthorised, meaning their sites are prohibited for consumers, the Financial Times reported on Sept. 10. France blocked access citing concerns it could expose users to significant gambling losses, Reuters reported in July. Polymarket said it intends to challenge France's decision to block its website in the country.
The UK position draws a line inside the product itself. The FCA has said it can oversee prediction markets on financial or certain climactic events, while markets offering trades on political outcomes and sports fall under the Gambling Commission.
The regulatory question extends beyond Europe. Polymarket is seeking regulatory approval to offer margin trading in the US, which would let users bet on events with less capital upfront, Bloomberg reported in July. The company states that its international platform is not regulated by the CFTC and operates independently. Its Help Center states that geographic restrictions are implemented "to ensure compliance with international sanctions and embargoes and local financial regulations." Documentation describes three groups of jurisdictional restrictions, with 'Block completely' meaning no new orders and no closing of existing positions.
The broader context here is definitional, and definitions decide compliance cost. Gambling supervision in Europe is national and license by license. Financial supervision works from a different rulebook. For a platform that lists financial, climactic, political and sports events in similar contract form, neither bucket fits cleanly.
In this author's view, the friction was predictable. Prediction markets use market structure and order books, yet resolve on events regulators have long treated as wagers. An EU watchdog warning that prediction markets are 'rife with insider trading' captures the overlap. Insider trading is a securities concept. Gambling losses are a consumer-protection concept. Polymarket is now arguing it belongs on one side of that divide, while its critics use language from both sides.
Worth flagging for technologists is what a resolution would unlock. Clear jurisdiction would determine what monitoring is expected, what disclosures apply, and what interfaces can legally serve European users. My children adopted new platforms without reading terms of service. Enterprises cannot. If Polymarket secures a durable financial-services footing, developers get a more stable base to build on. If it does not, geoblocks and license checks become the product.
