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Polymarket’s European Lobbying Campaign: A Guide to the Regulatory Battle Over Prediction Markets

By jili tutorial · September 25, 2026

Polymarket’s European Lobbying Campaign: A Guide to the Regulatory Battle Over Prediction Markets

Introduction: The High-Stakes Push for Financial Services Status

Polymarket, one of the largest prediction market platforms, has launched an intensified lobbying effort across Europe to be reclassified as a financial services company rather than a gambling operator. This strategic move, reported by The Financial Times, aims to open doors into markets where prediction markets are currently restricted or outright banned. The company is holding meetings with regulators in the United Kingdom and across the European Union, while also engaging with the European Securities and Markets Authority (ESMA) and the European Commission. At the heart of the campaign is a bid to persuade European authorities that Polymarket should fall under the European Union’s Markets in Financial Instruments Directive (MiFID), the framework that governs financial instruments such as derivatives and securities.

Why Classification Matters: Gambling vs. Financial Services

The Current Regulatory Reality

Under existing rules, most prediction markets are effectively off-limits to European retail customers. The distinction between gambling and financial services carries enormous consequences:

For Polymarket, being treated as a financial services provider would not only grant access to the entire EU single market but also place the platform under a more predictable, pan-European regulatory umbrella rather than facing a patchwork of national gambling laws.

The Lobbying Effort: Who Polymarket Is Talking To

Polymarket’s outreach spans multiple levels of European governance:

The company’s goal is to create a unified regulatory consensus that prediction markets with binary (yes/no) outcomes and fixed payouts are financial instruments, not gambling products.

Regulatory Hurdles: The Gambling Sector Strikes Back

A Coordinated Crackdown by European Gambling Regulators

In June 2024, nine European gambling regulators announced a joint initiative targeting unlicensed prediction market platforms across the continent. This unprecedented collaboration highlighted the growing concern among gambling authorities that platforms like Polymarket are offering services that effectively constitute gambling without proper licensing.

Notably, France’s l’Autorité Nationale des Jeux (ANJ) was part of this initiative. The ANJ had already banned Polymarket in 2024 after concluding that its services could amount to unlicensed gambling. French users were blocked from accessing the platform, and the regulator warned operators of potential penalties.

The Italy–Lazio Sponsorship Fallout

In Italy, Polymarket faced another setback. The platform had entered into a sponsorship agreement with Serie A football club Lazio. However, after the Italian gambling regulator named Polymarket as a prohibited site, the two parties were forced to agree to a mutual termination of the sponsorship. This high-profile case illustrates the real commercial risks of operating under a gambling-related stigma.

ESMA’s Stance: A Landmark Clarification

In July 2024, ESMA issued its first-ever official communication on prediction markets, providing a crucial regulatory reference point. The authority confirmed that prediction markets with binary yes-or-no outcomes and fixed payouts are classified as restricted financial instruments under EU law. Specifically, ESMA stated that contracts linked to equities, indices, interest rates, currencies, or commodities qualify as financial instruments and must be treated as derivatives. These contracts fall under Annex I of the Markets in Financial Instruments Directive II (MiFID II) regulation.

This position is significant because it aligns prediction markets with traditional financial derivatives – at least when the underlying event involves financial variables. However, it leaves open the question of non-financial events like sports or political outcomes, which may still be considered gambling under national laws.

How Other Jurisdictions Approach Prediction Markets

The United States: A Federal–State Tug-of-War

In the US, the Commodity Futures Trading Commission (CFTC) oversees prediction markets as financial derivatives. The CFTC has approved certain platforms, like Kalshi, to offer event contracts on economic and political outcomes. However, this federal position has faced strong opposition from several states, which have sought to regulate operators such as Polymarket and Kalshi under gambling laws. The result is a fragmented landscape where federal permission does not guarantee state-level access.

The United Kingdom: A Divided Regulatory Perimeter

The UK’s Financial Conduct Authority (FCA) has taken a more nuanced stance. In its FCA Perimeter Report, the authority stated that contracts on “financial or certain climatic events” fall under its own remit, while contracts on non-financial events such as sports or political outcomes should fall under the remit of the Gambling Commission. The FCA added: “We will consider whether we want to do further work on access to these products, and/or clarify the perimeter.” This suggests the UK may move toward a clearer, two-tier system – but no formal changes have been announced.

Gibraltar: A First Mover in Prediction Market Regulation

In a development that could serve as a template for Europe, Gibraltar became the first licensing region to establish a dedicated regulatory framework for prediction markets earlier in 2024. This framework allows platforms to operate under a bespoke regime that treats prediction markets as a distinct asset class, separate from both gambling and traditional financial instruments. Polymarket’s lobbying push in the EU and UK may be informed by Gibraltar’s approach, which provides a “clearer pathway” for companies willing to comply with specific rules.

Polymarket Joins Forces with Blockchain for Europe

Earlier this month, Polymarket announced its membership in Blockchain for Europe, an organization that works alongside policymakers to develop a regulatory framework for blockchain-based innovation in Europe. This membership is a clear signal that Polymarket is seeking allies in the broader crypto and blockchain policy community, which often advocates for technology-neutral regulation that recognizes the unique features of decentralized prediction markets.

What Success Would Mean for the Industry

If Polymarket’s lobbying succeeds, the immediate impact would be a reclassification of certain prediction markets from gambling to financial services under MiFID. This would:

However, significant obstacles remain. The 2024 joint action by gambling regulators shows that national authorities are unwilling to cede control without a fight. Moreover, ESMA’s statement only covers contracts with financial underlyings; sports and political contracts would likely remain under gambling laws unless the definition is broadened. Polymarket will need to navigate these nuances while building a persuasive case that its entire offering – including non-financial events – falls within the financial services perimeter.

Conclusion: A Crucial Moment for Prediction Market Regulation

Polymarket’s European lobbying push is not just about one company’s market access – it is a test case for how prediction markets will be regulated in the 21st century. The outcome will influence whether these platforms are treated as innovative financial tools subject to securities law, or as gambling products that face tight restrictions. With multiple regulators taking contrasting positions, the coming months will be decisive for the industry’s future in Europe.