ESMA Warns Prediction Markets Lack EU Authorization

The European Securities and Markets Authority has warned that major prediction market platforms, including Polymarket and Kalshi, lack the authorization generally required to market and sell event contracts to users across the European Union. In a report published on September 10, 2026, the Paris-based regulator stated that these platforms do not hold the EU permissions that may be necessary for their activities, raising concerns about investor protection and market integrity. ESMA's analysis indicates that event contracts can fall under different regulatory regimes depending on their characteristics. Contracts tied to a financial or commodity underlying may qualify as financial instruments under the Markets in Financial Instruments Directive (MiFID II). Tokenized contracts that are not financial instruments could instead fall under the Markets in Crypto-Assets (MiCA) framework. Other products may be treated as bets and require permission under the gambling laws of individual member states.