Polymarket Urges UK and EU Regulators to Apply Financial Services Rules to Prediction Contracts

Polymarket is lobbying regulators in the UK and across Europe to classify its prediction contracts as financial services products instead of gambling activities. The New York-based firm has held a series of meetings in London, Brussels and EU member states to make its case, according to reporting by the Financial Times.

The company, which is raising funds at a valuation of more than $20 billion, argues that its event-linked contracts should be treated as derivatives under the Markets in Financial Instruments Directive (MiFID). This would allow broader retail access in markets where prediction platforms currently face strict gambling prohibitions.

Regulator Meetings and Industry Ties

ESMA Chair Verena Ross met in June with two US-based members of Polymarket’s legal team, a Paris-based lawyer from A&O Shearman and a Brussels-based lobbyist from Hanbury Strategy. The next day, Polymarket executives met FCA chief executive Nikhil Rathi.

Polymarket stated: “As we grow our presence and expand globally, we are committed to engaging early and openly with policymakers and regulators.” The firm has joined Blockchain For Europe this month and begun talks with other regional trade organisations. It is also pursuing licences in selected EU jurisdictions.

Points of Regulatory Resistance

The FCA is reviewing retail access to prediction markets but has defended its ban on binary options for retail customers, citing their speculative and gambling-like nature plus the risk of consumer harm. Rathi’s agency views contracts on financial or certain climatic events as falling under its remit, while sports and political markets would sit with the Gambling Commission. Those segments account for much of the revenue at Polymarket and rival Kalshi.

Gambling regulators in the UK, France, Germany and Italy have stated that operators must hold gambling licences in their jurisdictions. ESMA warned this month that prediction markets are “rife with insider trading” and opposed any loosening of EU rules. In the US the CFTC oversees these platforms as financial derivatives, though some states seek to apply gambling laws.

Reporting: Yogonet International

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