ESMA Reports Major Prediction Markets Lack EU Authorization

The European Securities and Markets Authority (ESMA) has highlighted that prominent prediction market platforms, including Polymarket and Kalshi, have not secured the necessary authorization to offer event contract services within the European Union. This revelation comes from ESMA's latest risk report, which raises concerns about the compliance of these platforms with EU regulations.

ESMA noted that some of these platforms attempt to limit access by restricting users from specific EU countries. However, the authority questioned the effectiveness of these geographical restrictions and the use of VPN blocking measures, suggesting that they may not adequately prevent access to users within the EU.

The report further elaborated that the classification of event contracts could categorize them as financial instruments, which would subject them to the Markets in Crypto-Assets (MiCA) framework or the betting regulations of individual EU member states. If deemed financial instruments, the marketing, distribution, and sale of these contracts to retail investors would be constrained by existing restrictions on binary options.

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Source: KLEA News