The European Securities and Markets Authority has questioned whether major prediction-market platforms are legally authorized to offer event contracts across the European Union.
In its September risk report, ESMA said marketing and selling event contracts in the EU generally requires authorization that the largest platforms currently do not hold.
The classification depends on the product. A contract could be treated as a financial instrument, a crypto asset governed by MiCA or gambling regulated under national law. Contracts classified as financial instruments may also fall under restrictions on binary options sold to retail customers.
ESMA specifically questioned why platform-blocking lists do not include every EU member state and whether controls can effectively prevent users from bypassing restrictions with virtual private networks. (CoinDesk)
France has already ordered internet providers to block Polymarket. Other jurisdictions, including Belgium, Poland, Portugal and Spain, have also restricted access.
The regulator further warned that market-abuse rules may not reach misconduct when a prediction contract falls outside the financial regulatory perimeter. That creates the possibility of economically similar products receiving different surveillance and enforcement treatment.
TOKEN RECON ASSESSMENT
Prediction markets are confronting a fragmented regulatory battlefield where the same contract can be viewed as a derivative, crypto asset or gambling product.
The immediate risk is not necessarily an EU-wide shutdown. It is country-by-country enforcement, payment restrictions and inconsistent classification.
Watch formal action from national regulators, expanded geoblocking and whether Polymarket or Kalshi pursue authorized European structures.
