European Lotteries urges coherent approach to prediction markets across EU

The European Lotteries issued a statement in Brussels on 30 September 2026 calling for a coherent regulatory approach to prediction markets across Europe. The organisation warned that without alignment between financial and gambling supervisors new event-contract products could create loopholes or regulatory arbitrage that weaken consumer safeguards.

How prediction markets regulation should follow economic substance

Prediction markets let users take positions on future outcomes — elections, economic indicators or sports results — via so-called event contracts. The European Lotteries (EL) argues the legal treatment of those products must be driven by their legal characteristics, economic substance and the risks they create, not by marketing labels or the technology used to deliver them.

Under current European frameworks, event contracts that qualify as financial instruments under the Markets in Financial Instruments Directive (MiFID II) are subject to financial rules, while other event contracts fall under national gambling laws. EL emphasises that qualification as a financial instrument under MiFID II does not automatically remove a product from the scope of national gambling legislation; both frameworks can be relevant and require assessment on a jurisdiction-by-jurisdiction basis. EL recommends regulators and policymakers apply the same safeguards to economically equivalent risks, regardless of whether a product is promoted as an investment, a bet or delivered using distributed ledger systems.

"Activities that present similar risks should be subject to similar safeguards," said Piet Van Baeveghem, Secretary General of the European Lotteries.

EL also set out a principle of technological neutrality. Developments including distributed ledger technology, blockchain and tokenisation should not change the regulatory analysis simply because they alter how a product is delivered.

Jurisdictional challenges for prediction markets regulation

Gambling regulation remains a national competence across European Union Member States. EL therefore stresses that legality and licensing are matters for national authorities and that assessment must take place in each jurisdiction. That jurisdictional framework creates two practical frictions:

• products that qualify as financial instruments under MiFID II can still be treated as betting under national law; and

• differences in national licensing regimes can produce cross-border regulatory arbitrage unless supervisors coordinate.

Because of these frictions, EL calls for closer co-operation between financial supervisors and gambling regulators at national and EU level. The organisation highlighted the operational need for information-sharing and consistent enforcement to avoid gaps in consumer protection.

EL welcomes ESMA statement on event contracts and betting

EL explicitly welcomed a recent statement by the European Securities and Markets Authority (ESMA) in which ESMA recognised that event contracts may also constitute betting under national gambling law. EL said that ESMA’s acknowledgement underlines the importance of aligning the application of financial rules and gambling rules where products overlap in form and risk.

"We welcome the recent statement by the European Securities and Markets Authority, which explicitly recognises that event contracts may also constitute betting under national gambling law," Van Baeveghem added.

EL urged that the recognition by ESMA be followed by practical coordination between the European Securities and Markets Authority and national gambling supervisors to ensure consistent regulatory outcomes.

Practical implications for operators and supervisors

EL set out several practical implications for market participants and regulators. First, product assessment must be evidence-based: classification should rest on contractual terms and the product’s economic function. Second, supervisory cooperation is required so similar risks are regulated to the same standard, even across different legal frameworks. Third, technological neutrality means that the use of blockchain, tokenisation or other DLT techniques cannot be a determinative factor in classifying a product.

For operators, the message is that market entry decisions must consider both MiFID II exposure and national gambling rules in each Member State where they operate. For supervisors, EL recommends establishing mechanisms for information exchange and joint analysis where event contracts sit at the border between financial services and gambling.

Where EL wants policy to land

EL’s position is that prediction markets should remain within the existing European regulatory architecture rather than creating parallel regimes. The organisation wants policymakers to prioritise consistent enforcement and application of existing rules, closing gaps that could allow consumer protections to be weakened by product innovation or new distribution technologies.

EL is asking national regulators and European bodies to work together to ensure products that pose the same consumer risks carry the same safeguards, regardless of whether they are labelled as financial instruments or bets and irrespective of whether they use blockchain or conventional technology.

Regulatory coordination as the central recommendation

The European Lotteries concludes that coordinating supervisory responses is essential to prevent regulatory arbitrage and preserve consumer protections. That recommendation frames EL’s call for a product-led, technology-neutral approach to the governance of prediction markets across Member States.