Europe’s top securities regulator has raised questions about whether prediction-market platforms Polymarket and Kalshi can operate in the European Union without additional authorization. The European Securities and Markets Authority (ESMA) said event contracts could potentially fall within several existing regulatory frameworks, depending on their structure and the jurisdiction involved. These may include EU restrictions on binary options, the crypto-asset rules established under the Markets in Crypto-Assets Regulation (MiCA), or national gambling laws. ESMA’s comments point to possible authorization gaps for platforms offering contracts linked to real-world events. The statement does not establish a single EU-wide classification for such products, but highlights that their regulatory treatment may differ across existing financial and gambling regimes. The issue is relevant to crypto-market participants because prediction markets can use digital-asset infrastructure while also resembling financial derivatives or betting products. CoinDesk reported the regulator’s concerns on September 10, 2026.
