Polymarket seeks new path into European markets

Highlights

Polymarket wants financial oversight in Europe.
France blocked access to Polymarket in July.
Regulators are examining event contracts as derivatives.

The strategy puts Polymarket in discussions with the European Securities and Markets Authority and the U.K. Financial Conduct Authority. Bloomberg reported that the company is seeking a regulated European pathway for prediction markets, even as authorities remain concerned about consumer losses, market manipulation, and the boundary between trading and gambling.

France shows the regulatory obstacle

Its National Gambling Authority ordered internet providers to block Polymarket in July, describing its services as unauthorized gambling. The regulator said Polymarket recorded 578,751 visits from 205,057 unique visitors in France in June.

The French action followed concerns over prediction contracts tied to Paris temperatures. Authorities opened an investigation after suspected interference with weather sensors raised questions about whether markets could create incentives to manipulate events on which users place bets.

Restrictions extend beyond France. European regulators have taken differing approaches because the region lacks a single framework governing prediction markets. ESMA said in September that major platforms generally need authorization to market event contracts in the EU and questioned whether geographic restrictions used by Polymarket and Kalshi are effective.

Polymarket makes the derivatives case

Polymarket argues that certain contracts resemble financial derivatives rather than conventional wagers. That distinction could matter for markets linked to currencies, commodities, and other regulated financial assets.

The comparison has limits. Binary options already sit within European financial regulation, but retail access has faced tight restrictions because of their speculative structure. Sports and political contracts pose another problem because they do not fit as naturally within traditional securities regulation.

The issue is particularly significant for Polymarket because sports account for about 80% of onshore prediction-market activity. A financial classification for selected contracts would therefore not automatically settle how the broader platform should be regulated.

Europe tests the limits of prediction markets

The dispute is becoming a test of whether prediction markets can operate across Europe under financial rules rather than a patchwork of national gambling laws. A derivatives classification could provide a route for selected contracts, while sports, politics, and other event markets may remain subject to separate restrictions.

For regulators, the question extends beyond Polymarket. Event contracts combine features of derivatives, betting, and information markets while running continuously and allowing money to be placed on real-world outcomes. How Europe classifies them could determine whether prediction platforms gain broader access to one of the world's largest financial markets or continue facing country-by-country restrictions.

Earlier, we reported that Polymarket hires a Goldman Sachs veteran to expand its institutional liquidity push.

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