Polymarket Presses UK and EU Regulators to Reclassify Prediction Contracts as Financial Instruments Under MiFID
Polymarket Presses UK and EU Regulators to Reclassify Prediction Contracts as Financial Instruments Under MiFID #
Polymarket, the New York-based prediction markets platform, has been lobbying regulators in the United Kingdom and the European Union to classify its contracts as financial products rather than wagers subject to fragmented national gambling laws.
According to reporting by crypto.news and Hedgeweek, both citing an original Financial Times investigation, the company held high-level meetings in June with two senior European financial regulators. Legal representatives met European Securities and Markets Authority chair Verena Ross, accompanied by a Paris-based lawyer from A&O Shearman and a Brussels-based lobbyist from Hanbury Strategy. The following day, company executives held separate discussions with UK Financial Conduct Authority chief executive Nikhil Rathi. Polymarket has also engaged the European Commission and national supervisors as it works toward securing a European licence.
Its central argument is that its event-linked contracts should fall under the EU’s Markets in Financial Instruments Directive, or MiFID. The company contends these contracts more closely resemble derivatives than bets, an analogy with some precedent in the US, where Polymarket operates through QCX, a Commodity Futures Trading Commission-designated contract market. A MiFID classification would let the platform operate under a single regulatory framework rather than pursuing gambling licences country by country.
The push has met a cool reception on both sides of the Channel. ESMA issued a warning in July that prediction markets are rife with insider trading, and noted that some event-based contracts may already qualify as financial instruments under MiFID II, potentially triggering existing EU restrictions on retail binary options. The FCA, which is reviewing retail access to prediction markets, has maintained its ban on retail binary options, citing their speculative nature and risk of consumer harm. Under the current UK framework, contracts tied to financial or certain climate-related events fall under FCA oversight, while politically and sports-oriented markets, which generate the bulk of Polymarket’s revenue, remain under the Gambling Commission.
Gambling regulators in France, Germany, Italy, and the UK have all indicated that prediction market operators need a local licence. France ordered ISPs to block Polymarket in July; Spain launched a probe into its legality in May. The company has joined Blockchain for Europe and is in talks with other regional industry bodies.
Polymarket is fundraising at a valuation above $20 billion, backed by two investments from ICE, the parent of the New York Stock Exchange: $1 billion in October 2025 and a further $600 million in March 2026. “As we grow our presence and expand globally, we are committed to engaging early and openly with policymakers and regulators,” the company said in a statement cited by multiple outlets. Both ESMA and the FCA declined to comment.
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