Polymarket Pushes to Be Regulated as Finance, Not Gambling
Polymarket has asked regulators in the European Union and the United Kingdom to treat it as a financial services company rather than a gambling site. The talks were reported on Sept. 22 by Engadget citing the Financial Times.
The New York prediction market platform, where users buy and sell contracts tied to future events, spoke with the European Commission and the European Securities and Markets Authority (ESMA) about oversight under MiFID rules, the EU rulebook for investment firms and trading venues. In London, its representatives met with Nikhil Rathi, chief executive of the UK Financial Conduct Authority (FCA).
The goal is gambling law. Financial status would let Polymarket avoid national gambling licenses and challenge its bans in Spain and France. Spain blocked Polymarket and Kalshi in May during an investigation into operating without a gambling license. France ordered internet providers in July to block local access to Polymarket.
Under current rules, Polymarket must hold a gambling license in each EU country where it operates. In Europe, Polymarket and Kalshi remain largely unauthorised, which means their sites are prohibited for consumers, the Financial Times reported on Sept. 10. France blocked access over concern users could face significant gambling losses, Reuters reported in July. Polymarket said it plans to challenge the French block.
In Britain, regulators split the product by topic. The FCA has said it can oversee markets tied to financial or certain climate-related events, while markets on politics and sports sit with the Gambling Commission.
The question goes beyond Europe. Polymarket is seeking US approval to offer margin trading, which lets users place larger bets while putting up less cash upfront, Bloomberg reported in July. The company says its international platform is not regulated by the CFTC and operates independently. Its Help Center says geographic limits are set "to ensure compliance with international sanctions and embargoes and local financial regulations." Its documents list three groups of country restrictions, with 'Block completely' meaning no new orders and no closing of existing positions.
The broader context here is definitional, and definitions set compliance costs. Gambling oversight in Europe is national, license by license. Financial oversight follows a different, EU-wide rulebook. A platform that lists financial, climate-related, political and sports contracts in the same format does not sit cleanly in either category.
In my view, this friction was predictable. Prediction markets work like exchanges, with order books that match buyers and sellers, but they settle on outcomes regulators have long treated as wagers. That overlap explains why an EU watchdog described prediction markets as 'rife with insider trading,' a securities term, while French authorities warned about gambling losses, a consumer-protection term. Polymarket argues it belongs on the finance side, while critics use language from both sides.
For technologists, the practical question is what clarity would unlock. A clear home would set what monitoring is required, what disclosures apply, and what interfaces can legally serve European users. My children signed up for new platforms without reading the terms. Enterprises cannot do that. If Polymarket gains a stable financial footing, developers get a firmer base to build on. If not, geoblocks and license checks become the product.
