Polymarket launches European lobbying push to secure financial services status

Polymarket has stepped up efforts to be classified as a financial services company in Europe rather than a gambling operator.

According to The Financial Times, the prediction markets operator Polymarket is lobbying European regulators in an attempt to enter markets in which prediction markets are currently restricted or banned.

Polymarket is reportedly meeting regulators in the UK and across the European Union, while also discussing the matter with the European Securities and Markets Authority (ESMA) and the European Commission.

The company is attempting to persuade authorities across Europe that it should fall under the European Union’s Markets in Financial Instruments Directive (Mifid), which regulates financial instruments.

European scrutiny on Polymarket

Prediction markets are largely unavailable to European retail customers under current rules.

In June, nine European gambling regulators announced a joint initiative targeting unlicensed prediction market platforms across the continent.

These regulators included France’s l’Autorité Nationale des Jeux, which banned Polymarket in 2024 after concluding its services could constitute unlicensed gambling.

In Italy, Polymarket and Serie A football club Lazio were forced into a mutually agreed termination of a sponsorship agreement after the company was named as a prohibited site by the Italian gambling regulator.

But should Polymarket’s lobbying efforts succeed, its classification as a financial services company could enter a clearer pathway into Europe beyond Gibraltar, which became the first licensing region to establish a dedicated regulatory framework for prediction markets earlier this year.

Regulatory hurdles for Polymarket

In July, the ESMA confirmed that prediction markets with binary yes-or-no outcomes and fixed payouts are classified as restricted financial instruments.

In its first time discussing prediction markets, the ESMA confirmed that certain contracts linked to equities, indices, interest rates, currencies or commodities qualify as financial instruments and should therefore be treated as derivatives.

Contracts such as these fall under Annex I of the Markets in Financial Instruments Directive II (MiFID II) regulation.

In the US, the Commodity Futures Trading Commission oversees prediction markets as financial derivatives, although that position has faced opposition from several US states which have sought to regulate operators such as Polymarket and Kalshi under gambling laws.

In the UK, meanwhile, the Financial Conduct Authority (FCA) stated in its FCA Perimeter Report that contracts on “financial or certain climatic events” come under its own remit, while non-financial events such as sports or political outcomes should fall under the remit of the Gambling Commission.

“We will consider whether we want to do further work on access to these products, and/or clarify the perimeter,” the FCA said.

Earlier this month, Polymarket joined Blockchain for Europe, an organisation that works alongside policymakers to develop a regulatory framework for blockchain-based innovation in Europe.