Prediction Markets and Gambling Law in the EU: Where Polymarket-Style Platforms Stand

Prediction markets let users trade contracts on the outcome of real-world events, from elections to sports to economic data. In the United States, platforms have pursued a financial-regulation route through the CFTC. In Europe, the same activity looks a lot like betting, and regulators are treating it accordingly. This guide explains where the line falls and what a compliant European launch would require.

What a prediction market is, legally

A prediction market contract pays out based on whether an event occurs. Economically that is indistinguishable from a bet: the user stakes money on an outcome and receives a return if right. The difference lies in structure, with contracts traded on an order book between users rather than against a bookmaker, and in the framing as information markets or financial instruments.

The US approach

In the United States, some platforms have registered with the Commodity Futures Trading Commission as designated contract markets, arguing that event contracts are derivatives. That route has been contested, particularly for contracts on elections and sports, with state gambling regulators asserting jurisdiction. The outcome remains in flux, but it has created a regulatory model that does not exist in Europe.

The European position

EU financial regulation under MiFID II covers derivatives on financial instruments, commodities and certain indices, but contracts on elections, sports or entertainment events do not fit those categories. That leaves gambling law, which in almost every member state defines betting broadly enough to cover event contracts with a stake and a prize. Peer-to-peer structures and crypto settlement do not change the analysis: betting exchanges have long been licensed as gambling operators in Europe. Regulators in several countries have warned against or blocked prediction platforms serving their residents without a licence.

Crypto and decentralisation

Decentralised prediction markets settled in stablecoins raise the same questions plus AML and crypto-asset regulation under MiCA. Front-ends and operators facilitating access to such markets for EU residents can be treated as organising or promoting unlicensed gambling, regardless of where the smart contracts run.

Launching compliantly in Europe

A prediction market for EU users would in practice require a betting or betting-exchange licence in each targeted market, with the usual obligations on player verification, responsible gambling, AML and taxation. Some jurisdictions, such as Malta and the UK, have licensed betting exchanges and could accommodate a prediction-market format. Restrictions on event types, notably political betting, vary by country and must be mapped.

Poland

In Poland, betting on the outcome of events is mutual betting requiring a permit, and only sporting and similar events approved by the Minister of Finance may be offered, which effectively excludes political and many other prediction-market contracts for licensed operators.

Our licensing practice advises fintech and gaming companies on the classification and licensing of prediction-market products in Europe.