Polymarket Lobbies Europe to Be Seen as Finance, Not Gambling

According to the Financial Times, Polymarket is lobbying EU and UK regulators to be recognised as a financial services firm rather than a gambling operator. The company hopes that this will exempt it from national gambling laws and help to overturn the bans in Spain and France. It has approached the European Commission and the European Securities and Markets Authority (ESMA), seeking to be regulated under the Markets in Financial Instruments Directive (MiFID), the EU directive for investment services. 

The platform allows users to bet on elections, sports events, film premieres, and international conflicts. In May, Spain blocked Polymarket and Kalshi while investigating whether they were operating legally without a gambling licence. In July, France ordered internet providers to restrict local access to Polymarket. EU states require a gambling licence. According to the FCA, political and sports markets fall under the remit of the UK Gambling Commission, while financial and certain climate markets may be overseen by the FCA.

However, ESMA appears unenthusiastic about easing prediction-market rules, warning that they are ‘rife with insider trading‘. Recently, a Google employee, three political candidates and a White House staff member were accused of trading on inside information. Polymarket has also reportedly paid social media influencers to create fake betting videos for advertising purposes. According to The Wall Street Journal, half of the ‘winning’ bets would have lost in real life.