European Lotteries urges coordinated regulation of prediction markets

European Lotteries calls for coordinated regulation of prediction market platforms

In a submission to European policymakers, European Lotteries — the Brussels umbrella body for state-owned and state-controlled lottery operators across the continent — has asked for prediction market platforms to be brought under coherent, technologically neutral regulatory oversight, with effective coordination between national authorities.

The timing is not accidental. While American courts are working through whether prediction markets are swaps, commodities, or something the Commodity Exchange Act never contemplated, the European debate is one step further back: whether the frameworks that govern traditional gaming apply at all, and if not, who decides.

That is the harder problem. In the United States, there is at least a statute — the CEA — and a regulator with a defined mandate, however contested its application. In Europe, gambling regulation sits predominantly with member states, which means a platform operating across borders encounters as many compliance regimes as there are jurisdictions. A ruling in the Netherlands tells you nothing about what Belgium will do next. European Lotteries is not asking for a single European gambling licence; it is asking that the patchwork not become a vacuum.

The phrase "technologically neutral" is doing real work in their submission. It means: the question of whether a prediction market is a lottery, a sports bet, a derivative, or something else should not determine whether it is regulated. The conduct — taking positions on uncertain outcomes, managing risk, paying out on resolution — is what matters, not the architecture underneath it. That is a sensible principle, and it is one that the American litigation has largely ignored in favour of definitional warfare.

The lobbying interest here is legible. State lotteries and state-licensed gaming operators compete for the same leisure budget that prediction markets are now absorbing. European Lotteries representing those operators is not a neutral technical body. But that does not make the argument wrong. The 38-out-of-43 state ruling record in the United States, cited by Daniel Wallach at G2E last week, reflects exactly what happens when platforms expand into regulatory gaps and force jurisdictions to decide case by case whether existing law covers them. Europe is watching that play out in real time and trying to avoid the same sequencing.

My own read here diverges from the consensus, which treats the European Lotteries position as straightforward incumbent protectionism. I think that undersells the structural risk. Prediction markets in Europe are growing without a coherent framework not because regulators are asleep but because the question of jurisdiction is genuinely unsettled. When Polymarket faced a Dutch fine, it contested the ruling in The Hague. That is one data point. The absence of a coordinated European position means the next platform gets a different answer in a different court in a different country, and the inconsistency compounds.

I am adjusting for my own tendency to weight the downside scenario. But the downside here is not a crisis — it is a decade of fragmented enforcement that advantages whichever platforms are willing to operate in ambiguity the longest. That is not an argument against prediction markets. It is an argument that the absence of a framework has its own costs, and European Lotteries, whatever its motivations, is identifying a real one.