Polymarket Lobbies London and Brussels to Have Event Contracts Called Finance

The exchange has been meeting regulators in the UK and the EU to argue that its contracts belong to financial supervisors rather than gambling ones, the Financial Times reports, after being blocked in Italy, the Netherlands and France. Britain's Gambling Commission says a prediction market launching here could not classify itself as non-gambling.

• Polymarket is running a lobbying campaign in the United Kingdom and the European Union to have its event contracts treated as a financial service rather than gambling, the Financial Times reports, with meetings in London and in Brussels including the European Commission and the European Securities and Markets Authority, as well as national regulators
• The aim, according to the FT, is to persuade European authorities to take the approach the US Commodity Futures Trading Commission has taken; the company has been blocked in Italy, the Netherlands and France among others
• Britain's Gambling Commission has made no formal determination but says that "if a prediction market operator was to launch here in Great Britain, we do not believe they would be able to classify themselves as non-gambling products"; an initial determination noted that products meeting the UK definition of gambling must be licensed by the Commission, with spread betting the exception regulated by the Financial Conduct Authority
• The FCA has been consulting on expanding consumer access to investments including "speculative products", a category prediction markets could in theory fall into
• Gibraltar licensed ADI Predictstreet this summer as the first betting intermediary under its new Gambling Act and has since created a regime specifically for event contracts; Malta is exploring a statutory framework and argues the products should be assessed individually

The Argument That Won in Washington Is Being Tried in Europe

Polymarket has begun lobbying regulators in the United Kingdom and the European Union to have its event contracts classified as financial instruments rather than gambling products, according to the Financial Times, in what the paper describes as a lobbying blitz. Company representatives have met regulators in London, and in Brussels with the European Commission and the European Securities and Markets Authority, as well as national regulators across the EU. The objective is to have European authorities adopt the position the Commodity Futures Trading Commission has taken in the United States, where Polymarket and Kalshi operate as federally regulated exchanges outside state gambling law.

The starting position is unpromising. European gambling regulators have generally treated prediction markets as gambling and, offered without a licence, as illegal gambling: Polymarket has been blocked in Italy, the Netherlands and France, among other markets. In Britain, the Gambling Commission has not made a formal determination on the legal status of prediction markets, but told SBC News that "if a prediction market operator was to launch here in Great Britain, we do not believe they would be able to classify themselves as non-gambling products". An earlier determination set out the principle: "Commercial products meeting the definition of gambling under UK legislation must be licensed and regulated by the Gambling Commission. Spread betting is an exception which is regulated by the Financial Conduct Authority."

That exception is the crack the company is working at. The FCA has been consulting on expanding consumer access to investments, including speculative products, and the existence of a financially regulated betting product in British law gives the argument a precedent to point at. The timing is also fiscal: UK government borrowing reached £18.3 billion in August, the Budget is due on 28 October, and the EU has a spending programme of more than €2 trillion to fund in its next cycle.

Two smaller jurisdictions have already moved. Gibraltar licensed ADI Predictstreet this summer as the first betting intermediary under its new Gambling Act, applying dedicated rules to prediction markets, and has since created a regime specifically for licensing and supervising event contracts. Malta, an EU member state and the largest licensing hub in European online gambling, is exploring a statutory framework and takes the position that the products should be assessed individually rather than treated automatically as betting.

The lobbying comes days after the Wall Street Journal reported that Polymarket US dropped an anti-laundering control during a stolen-card attack and that the CFTC is investigating, and as the company raises about $1 billion at a $21 billion valuation.

Europe's Regulators Do Not Have the Jurisdictional Gap the CFTC Filled

The American argument works because the Commodity Exchange Act is federal and gambling law is state, so an exchange that is one thing federally can claim not to be the other locally. In Europe there is no equivalent seam. Gambling is a national competence, financial services are largely harmonised, and a product offered to a consumer in Italy is judged by Italian law whatever ESMA thinks of it. Polymarket's ask is therefore not a jurisdictional argument but a definitional one: convince each member state's government that an event contract is a derivative. That is 27 conversations, not one, and the European Commission is not the body that decides.

The Gambling Commission's Sentence Is the Whole British Answer, and It Is Not Final

"We do not believe they would be able to classify themselves as non-gambling products" is a statement of belief, not a determination, and the Commission has pointedly not made one. Spread betting shows that Britain will put a wagering product under the FCA when the instrument looks financial enough, and the FCA's own consultation on speculative products opens a door that did not exist two years ago. What makes this hard for Polymarket is not the law but the politics: a government raising gambling taxes, reviewing the sector's high-street presence and facing a Budget it must sell will not want to be the administration that let a new category of betting in through the financial-services entrance.

Gibraltar and Malta Are the Realistic Route, and They Are Not the Prize

A Gibraltar licence gives an exchange a credible supervisor and limited reach: Gibraltar sits outside the EU. Malta would be the real breakthrough, because a Maltese framework for event contracts would let an operator argue it is regulated in an EU member state, which is the beginning of a freedom-of-services argument Malta has made on gambling before. Both jurisdictions are doing what they have always done: writing a regime for a product the larger states have not yet decided about, and collecting the licensees who need an address while the argument runs.

Polymarket has taken the case that won it the United States to a continent with a different legal architecture and less appetite for the answer. The FT reports a lobbying campaign; the regulators it is lobbying have already published their position.