Polymarket · The Block
Both Polymarket and Kalshi prohibit users in some, but not all, EU countries from placing orders, according to the regulator
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ESMA also raised concerns about insider trading and market manipulation on prediction markets, particularly DLT-based platforms such as Polymarket, where it said limited identity verification and pseudonymous participation can make suspicious activity harder to detect.
Key facts
- George Santos after he traded a contract tied to his attendance at the State of the Union and was ordered to pay a fine of more than $71,000
- The European Securities and Markets Authority said the largest prediction market platforms lack the authorization generally required to market and sell event contracts in the EU, as it questioned
- Both Polymarket and Kalshi prohibit users in some, but not all, EU countries from placing orders, according to the regulator
- However, the regulator said prediction markets remain relatively limited in scale within the EU, even as Eurex, Euronext, CME Group, Cboe, ICE, and Nasdaq show growing interest in prediction-style
Summary
The European Securities and Markets Authority said the largest prediction market platforms lack the authorization generally required to market and sell event contracts in the EU, as it questioned the effectiveness of restrictions used by Polymarket and Kalshi to block users in some member states. In a report published Thursday, the Paris-based regulator wrote that event contracts can fall under different regulatory regimes depending on their characteristics. "As a result, the marketing and sale of event contracts in the EU generally requires an EU authorization, which the largest prediction market platforms currently do not hold," the regulator said. Where contracts qualify as financial instruments, they would generally be classified as derivatives and fall within national product intervention measures on binary options, which prohibit marketing, distribution, and sale to retail investors, ESMA said. Both Polymarket and Kalshi prohibit users in some, but not all, EU countries from placing orders, according to the regulator.