Polymarket seeks MiFID treatment for prediction markets
Polymarket has been engaging with the European Securities and Markets Authority and the European Commission, according to people familiar with the matter. Discussions have extended to individual national regulators as the company examines possible licensing routes within Europe.
ESMA chair Verena Ross met two U.S. based members of Polymarket’s legal team in June, accompanied by a Paris based lawyer from A&O Shearman and a Brussels based lobbyist from Hanbury Strategy. Polymarket executives met UK Financial Conduct Authority chief executive Nikhil Rathi the following day.
The company is seeking to convince European authorities that its contracts can operate under the Markets in Financial Instruments Directive, or MiFID, which sets rules for investment firms and financial instruments across the EU.
Such a classification would not automatically give Polymarket unrestricted access to European retail customers. ESMA warned in July that some event based contracts could already qualify as financial instruments under MiFID II, meaning existing EU restrictions on binary options could apply when the products meet the relevant definition.
Polymarket has continued discussions despite the regulatory hurdles.
“As we grow our presence and expand globally, we are committed to engaging early and openly with policymakers and regulators,” the company said.
As part of the effort, Polymarket joined trade group Blockchain For Europe this month and has started discussions with other European industry organizations, according to a person familiar with the matter.
European regulators have treated Polymarket differently
Polymarket’s push for financial regulation faces a fragmented European market where authorities have taken different approaches to event contracts.
National gambling regulators in countries including France, Germany and Italy have maintained that prediction markets require local gambling licenses. Retail access to many of the products remains restricted across Europe, although some users continue accessing overseas platforms through virtual private networks.
France has already taken direct action against Polymarket. French authorities ordered internet providers to restrict access to the platform after treating it as an unauthorized gambling service.
Similar action followed elsewhere in Europe. In July, the Czech Ministry of Finance ordered internet service providers to block Polymarket after authorities classified the service as an unauthorized internet game. Czech regulators said the platform had to comply with the country’s gambling framework regardless of how its contracts were described.
ESMA has taken a separate approach by examining whether certain prediction contracts can fall within existing financial market legislation. Its July guidance said firms offering event based contracts must assess whether individual products qualify as financial instruments under MiFID II.
The distinction depends partly on the structure and underlying event of a contract. Prediction markets allow users to trade positions tied to outcomes across financial markets, sporting events, elections, economic decisions, entertainment awards and weather.
ESMA has remained cautious about loosening existing protections for retail investors. The regulator warned this month that prediction markets face risks involving insider trading, an issue that has drawn scrutiny as trading volumes and the range of available contracts have increased.
UK rules split contracts between two regulators
Britain presents another regulatory hurdle because oversight depends on what event determines a contract’s outcome.
The FCA considers prediction contracts linked to financial events and certain climate outcomes to fall within its regulatory perimeter. Political and sports markets, which account for significant activity across platforms such as Polymarket and Kalshi, would instead come under the Gambling Commission.
Britain has prohibited the sale of binary options to retail consumers since 2019. The FCA has maintained that the products can be highly speculative, resemble gambling and expose consumers to significant potential losses.
However, the regulator has recently discussed whether its treatment of retail financial prediction markets should change. As crypto.news previously reported, the FCA has held talks with trading platforms about potentially reopening access to certain financial prediction products for retail investors.
No formal rule change has been announced. As of September, the FCA had not published a consultation, proposed rule or implementation timetable that would allow Polymarket or another platform to offer financial event contracts broadly to British retail customers.
Gambling regulators have maintained a different position for contracts outside the FCA’s perimeter. Political and sports prediction markets would require the appropriate gambling authorization in the UK, creating separate regulatory routes depending on the event being traded.
Polymarket valuation has climbed during regulatory push
Polymarket’s European lobbying effort comes while the company seeks another major financing round.
The platform has been discussing approximately $1 billion in new funding at a valuation above $20 billion. A proposed round led by Donald Trump Jr. linked 1789 Capital would value Polymarket at $21 billion, with the investment firm planning to contribute roughly $300 million.
1789 Capital had previously invested approximately $200 million in the company, while Intercontinental Exchange has emerged as another major backer. ICE, the parent of the New York Stock Exchange, invested $1 billion in Polymarket in October 2025 and disclosed another $600 million investment in March 2026.
The company has pursued regulated market access in the United States alongside those investments. Its U.S. operation runs through QCX, a Commodity Futures Trading Commission designated contract market acquired by Polymarket as part of its return to the American market.
European expansion remains subject to a different set of rules. Polymarket is seeking financial services treatment at the same time that national gambling authorities continue to require local licenses for many of its products, while existing EU and UK restrictions could limit retail access even when some contracts qualify as financial instruments.
ESMA and the FCA declined to comment on Polymarket’s latest regulatory discussions.
