Polymarket, a New York-based prediction markets platform, is intensifying efforts to engage regulators across Europe and the UK to secure treatment under financial services laws rather than gambling regulations. The company argues that such a reclassification would enable broader growth opportunities.

Polymarket allows users to speculate on various future events, including sports outcomes, election results, central bank decisions, entertainment awards, and weather phenomena. While popular in the United States, the platform faces significant regulatory challenges in Europe, where prediction markets are generally prohibited for retail investors. This has constrained the company’s ability to expand within the region.

To advance its position, Polymarket has been meeting with officials at the European Securities and Markets Authority (ESMA), the European Commission, the UK Financial Conduct Authority (FCA), and several national regulators within EU member states. The company is seeking to be regulated under the Markets in Financial Instruments Directive (MiFID) framework, which governs financial services, instead of being subject to differing national gambling laws.

Polymarket contends that its contracts should be treated as derivatives — similar to financial instruments — rather than as bets. This argument has gained some traction in the US, where the Commodity Futures Trading Commission (CFTC) oversees prediction markets as financial derivatives. However, even in the US, Polymarket’s regulatory status is contested, as some states aim to classify these platforms under gambling laws.

In June, ESMA chair Verena Ross met representatives from Polymarket and their legal counsel, while the following day, Polymarket executives held discussions with FCA chief Nikhil Rathi. The company has also joined the trade association Blockchain For Europe as part of its advocacy efforts.

While the FCA has indicated it is reviewing rules governing retail investors' access to prediction markets, it maintains a ban on binary options for retail customers, citing the speculative and gambling-like nature of these products and concerns over consumer harm. The FCA differentiates between prediction markets based on their subject matter, asserting that those related to financial or certain climatic events fall under its oversight, while markets focused on political outcomes or sports — areas where Polymarket and competitors like Kalshi derive most revenue — come under the Gambling Commission's jurisdiction.

Regulators in the UK and multiple EU countries currently require prediction markets to obtain local gambling licenses. ESMA has expressed reluctance to relax EU rules on prediction markets, warning recently about risks including potential insider trading.

Both ESMA and the FCA declined to comment on Polymarket’s ongoing lobbying activities. Polymarket stated that as it continues to expand globally, it remains committed to engaging openly and early with policymakers and regulators.