ESMA Warns Prediction Market Contracts May Fall Under EU's Retail Binary Options Ban

ESMA Warns Prediction Market Contracts May Fall Under EU's Retail Binary Options Ban

The European Securities and Markets Authority said Friday that some “event contracts,” the yes-or-no wagers underpinning prediction markets like Kalshi and Polymarket, may fall under the EU’s existing ban on marketing and distributing binary options to retail investors. ESMA said event contracts with a binary payout tied to the outcome of a future event whose underlying assets are financial instruments under MiFID II are derivatives. The commerc…

Prediction Markets: ESMA Confirms Application of Binary Options Product Intervention Measures to Event Contracts

ESMA’s statement reinforces that existing EU Member State product intervention measures on binary options apply to event contracts which constitute financial instruments.By José María Alonso, Gabriel Lakeman, Axel Schiemann, Thomas Vogel, and Paloma ArizonKey Points: ESMA’s statement does not address some key areas of uncertainty in this area, such as the distinction between financial services and gambling regimes. ESMA reminded firms that exist…

Prediction contracts are prohibited binary options, ESMA says - Global Trading

While the CFTC is suing any state that dares to question the legitimacy of prediction markets, the European Securities and Markets Authority (ESMA) has issued a notice reminding market participants […] This content is for registered users only. Please log in below, or REGISTER HERE to continue reading. Username Password Remember Me     Forgot Password

Gaming in Europe: Do prediction markets have a place in Europe?

Prediction markets were placed front and centre at the latest Gaming in Europe webinar, with a panel of legal and gambling experts setting the record straight about the medium’s place in the local market. Platforms like Kalshi and Polymarket have caused a stir across the regulated gambling sector over the past few years. Many believe that their offer is not much different from sports betting, but prediction market platforms have remained adamant…

ESMA Warns Prediction Market Platforms Could Face Strict EU Financial Regulations

On July 3, ESMA issued a statement warning that some event contracts resembling binary options could fall under current derivatives regulation. The regulator stressed that firms offering these instruments should assess whether these contracts fall under this classification to comply with regulatory requirements. Europe Puts Its Sights on Binary Options-Like Event Markets The European Securities […]