Regulation of Predictive Markets in Europe: Challenges and Changes

On July 16, the president of the French regulator, l'Autorité Nationale des Jeux (ANJ), ordered the blocking of access to Polymarket, a well-known predictive market platform, due to the illegal promotion of gambling services. The platform attracted a significant number of users: 578,751 visits and 205,057 unique visitors just in June. However, this decision was not sudden; it resulted from prolonged correspondence with Adventure One QSS Inc, the operating company of Polymarket, beginning in November 2024. The company attempted to limit financial transactions from France, but the regulator noted that these measures were circumvented.

Issues with Predictive Platforms

Predictive platforms, such as Polymarket, are often classified as illegal in France as they show signs of addiction and lack the protective mechanisms present in the legal market. The basis for action was also suspicion of unfair play: bets were placed on the weather, which supposedly implied interference with sensor operations. On May 4, the Paris Cybercrime Unit began an investigation, establishing that the platform lacked a user identification system.

For unauthorized promotion of gambling, the site may be fined up to €100,000—a power that the ANJ has already exercised, blocking 1,290 URLs in 2025. The authors of this initiative are not alone: Germany, Belgium, Romania, and other countries have also restricted access to predictive markets.

Regulatory Changes by ESMA

On July 3, the European Securities and Markets Authority (ESMA) reminded companies of the need to assess new products for compliance with existing measures regarding binary options. Event contracts falling under these measures now require an investment firm license for distribution in the EU, even if clients are not retail.

Wolf Hambach noted that these changes are linked to the MiFID II directive. Event contracts that involve beneficiaries such as interest rates or currency pairs are considered derivatives and fall under the ban on retail binary options.

"If a product functions as a financial instrument, it should not avoid financial regulation by being called a predictive market," emphasized Ismail Vali, President of Gaming Compliance International.

Gibraltar's Approach

On July 10, Gibraltar introduced its own regulations, creating a licensing category for predictive markets under the new Gambling Act of 2025. Minister Nigel Feetham described this as a unique framework for the world. However, ESMA asserts that derivatives remain banned, regardless of gambling licenses or MiCA licenses.

Conclusions for Operators

The current changes mean that operators must adapt to local rules and obtain licenses or exit markets where this is impossible. The era of unlimited predictive markets is coming to an end, and now regulators will evaluate them in terms of consumer protection, safety, and taxation. "If they do not do this, regulators will consider them as tax and regulatory leaks," states Vali.