Polymarket pushes for MiFID status in European lobbying drive

In July, the European Securities and Markets Authority said something it had never said before about prediction markets. Binary yes-or-no contracts tied to financial underlyings — equities, rates, currencies, commodities — qualify as financial instruments under MiFID II. That single sentence from ESMA, the first time the authority had addressed the sector directly, is now the foundation on which Polymarket is building an entire European strategy.

The company is meeting regulators in the UK and across the EU, and has opened discussions with both ESMA and the European Commission. The argument is straightforward: if ESMA has already classified certain prediction market contracts as derivatives, then Polymarket belongs inside the financial services perimeter, not the gambling one. The lobbying push is an attempt to turn a regulatory opinion into a regulatory pathway before any European authority decides to treat the question as settled in the other direction.

The opposition is not abstract. Nine European gambling regulators launched a coordinated action against unlicensed prediction market platforms earlier this year. France's ANJ banned Polymarket in 2024. In Italy, a sponsorship agreement with Lazio ended after the Italian gambling regulator named Polymarket as a prohibited site. The company is not entering a neutral environment. It is entering one where regulators have already moved, and moved against it.

What makes the European push harder than the American one is the FCA's position in the UK. The regulator has drawn a line inside the MiFID question: contracts on financial or climatic events fall under its remit; contracts on sports or political outcomes go to the Gambling Commission. That split matters because the most liquid prediction markets — elections, sports, cultural events — sit on the wrong side of it. Polymarket can argue MiFID all it wants, and the FCA will agree with it about rate contracts and decline jurisdiction over everything else.

The consensus read on this lobbying push is that it is a long shot, and I think that undersells how seriously ESMA's July classification changes the position. Regulators respond to precedent, and ESMA created one. The question is whether Polymarket can get the right contracts classified correctly before European gambling regulators consolidate around a different answer. Gibraltar already has a dedicated framework. If a second European jurisdiction moves before the classification fight is resolved, it starts to look like a race rather than a wall.

The parallel US dynamic is instructive here. CFTC jurisdiction over event contracts as derivatives did not prevent state gaming regulators from filing cease-and-desist orders. A favourable MiFID classification would not automatically override national gambling frameworks in France, Italy, or Germany. It would create the legal argument. It would not win it.