Polymarket is lobbying regulators across Europe and the United Kingdom to have its prediction contracts supervised as financial products rather than gambling — a push that comes as the company seeks roughly 1 billion USD in new funding at a valuation above 20 billion USD, according to the Financial Times.
By Maria Rodriguez | September 23, 2026
The Hook: A Betting Platform Wants to Be Treated Like a Stock Exchange
Prediction markets let people buy positions on outcomes — elections, sports, economic data, awards, even weather. For years, European regulators have mostly treated these platforms like online casinos. Polymarket wants to change that, and it is spending real effort doing so. According to people familiar with the discussions, the New York-based company has held talks with regulators in London, Brussels, and several European Union jurisdictions as it works toward securing a European license. Its argument: contracts that behave like derivatives should be regulated like derivatives, under the Markets in Financial Instruments Directive, or MiFID — the EU rulebook for investment firms and financial instruments.
The lobbying operation is sophisticated. ESMA chair Verena Ross met two U.S.-based members of Polymarket’s legal team in June, accompanied by a Paris-based lawyer from A&O Shearman and a Brussels-based lobbyist from Hanbury Strategy. The following day, Polymarket executives met Nikhil Rathi, chief executive of the UK Financial Conduct Authority. The company has also joined the trade group Blockchain For Europe and opened discussions with other European industry organizations.
The Evidence: A Fragmented Continent Pushing Back
Polymarket’s challenge is that Europe has no single answer for what a prediction market is. National gambling regulators in France, Germany, and Italy maintain that prediction markets require local gambling licenses, and retail access to many of these products remains restricted across the continent — although some users keep reaching overseas platforms through virtual private networks.
- France — ordered internet providers to block Polymarket after treating it as an unauthorized gambling service.
- Czech Republic — in July, the Ministry of Finance ordered ISPs to block the platform within 15 days, classifying it as an unauthorized internet game.
- ESMA — warned in July that some event-based contracts could already qualify as financial instruments under MiFID II, which would trigger existing EU restrictions on binary options.
- United Kingdom — has banned the sale of binary options to retail consumers since 2019, citing speculation and consumer harm.
The distinction that determines who regulates what depends partly on the structure and underlying event of each contract. A market on whether an interest-rate decision lands above or below a threshold looks very different, legally, from a market on a football match. The FCA considers prediction contracts linked to financial events and certain climate outcomes to fall within its regulatory perimeter, while political and sports markets — which account for significant activity on platforms such as Polymarket and Kalshi — would come under the Gambling Commission instead. One platform, two regulators, two entirely different rulebooks.
The Core Conflict: Investor Protections vs. Market Access
Here is the tension a regular investor should understand. Polymarket believes financial-markets supervision is a better fit for its products than casino rules — more legitimate, more scalable, more welcoming to institutional money. But securities regulators are not simply going to wave the contracts through. ESMA has stayed cautious about loosening protections for retail investors, warning this month that prediction markets face risks involving insider trading as trading volumes and the range of available contracts grow. Its July guidance requires firms offering event-based contracts to assess whether individual products qualify as financial instruments under MiFID II — and if they do, the EU’s existing binary-options restrictions may apply anyway.
In other words, even if Polymarket wins MiFID treatment, it does not automatically win European retail customers. The classification could bring compliance obligations and product restrictions rather than open access. The FCA, for its part, has recently discussed whether its treatment of retail financial prediction markets should change, holding talks with trading platforms about potentially reopening access to certain financial prediction products — but as of September, no consultation, proposed rule, or implementation timetable has been published. Both ESMA and the FCA declined to comment on Polymarket’s latest discussions.
Market Implications: Billions Ride on the Definition
Follow the money and the stakes become obvious. Polymarket has been discussing approximately 1 billion USD in new funding at a valuation above 20 billion USD. A proposed round led by 1789 Capital, the investment firm linked to Donald Trump Jr., would value the company at 21 billion USD, with the firm contributing roughly 300 million USD — on top of the approximately 200 million USD it had previously invested. Intercontinental Exchange, the parent of the New York Stock Exchange, invested 1 billion USD in Polymarket in October 2025 and disclosed another 600 million USD investment in March 2026. Investors of that caliber do not put in that kind of capital for a company they expect to be regulated out of major markets.
In the United States, Polymarket already runs a regulated path: its U.S. operation runs through QCX, a Commodity Futures Trading Commission designated contract market it acquired as part of its return to the American market. Europe is the remaining prize — and the remaining fight. “As we grow our presence and expand globally, we are committed to engaging early and openly with policymakers and regulators,” the company said in a statement.
The Verdict
For everyday investors, the outcome of this lobbying effort will shape whether event-contract trading becomes a mainstream, supervised financial activity in Europe or remains a grey zone reachable only through workarounds. Financial supervision would bring transparency, complaint procedures, and insider-trading scrutiny — real protections. It would also likely bring product bans for retail users on the riskiest contract types. Neither outcome is a free pass for speculators. Watch for three signals: any formal ESMA follow-up to its July guidance, the FCA publishing an actual consultation on financial prediction markets, and whether France or the Czech Republic soften their blocking orders. Until then, a 21-billion-dollar question hangs over Brussels: is a bet on an election a wager, or a trade? Market snapshot at the time of writing: Bitcoin trades near 86,173 USD, Ethereum near 2,753 USD, and Solana near 118 USD.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
Raising 1 billion at a 20 billion valuation while still locked out of France, Belgium and the Czech Republic. investors are pricing in a regulatory win that has not happened yet
raising a billion while locked out of three countries is the tell. that money is earmarked for the compliance buildout, the exchange pitch only works if the license lands first
If the contracts behave like derivatives then regulating them under MiFID makes sense. Europe blocking things and pushing users to VPNs hasnt worked great so far
except MiFID means prospectus level compliance and none of these platforms survive that cost. be careful what you wish for
this. MiFID drags in best execution, transaction reporting, the whole compliance stack. fees on 1 cent markets wont cover that overhead
unless the fee model changes with it. tick sized fees on 1 cent prediction markets would need a whole new schedule, MiFID overhead or not
Agreed on the overhead. And a 1 billion raise at a 20 billion valuation means investors are pricing in the license win before any regulator has actually said yes.
exactly, the 20b valuation is a bet on regulators folding. one negative FCA statement and that 1b raise gets repriced mid-negotiation
the prospectus cost point is real but polynarket already burns cash on lawyers in half the member states anyway. one MiFID license amortizes across 27 markets, per-state gambling appeals do not
polymarket going to brussels asking to be treated like a stock exchange instead of a casino is the boldest rebrand attempt of the year lol
not a rebrand if the order book is the actual product. a 20b valuation is a hard sell on a casino license, on an exchange license its a pitch deck
while they negotiate, half the EU volume is already going through VPNs. regulate it properly and people might actually stop
boldest rebrand of the year and they are spending real lobbyist money on it. at least a casino is honest about the house edge
Czech ministry blocked it within 15 days and ESMA already hinted these contracts qualify under MiFID II. Polymarket shows up with lobbyists right as the door slams shut
AMF will not budge, France already blocked them. contracts that behave like derivatives fall under MiFID, not a gambling license. good luck with that argument
MiFID is exactly what they want though. an exchange license in one EU state passports across all 27, a gambling license dies at the border. the compliance cost is brutal but the prize is bigger
exactly, one license passporting across 27 states vs a gambling license that dies at every border. the compliance spend is a rounding error against that asymmetry
the uk part is messier tho. FCA would take financial markets, Gambling Commission takes politics and sports. same platform, two rulebooks, good luck pricing that
you run it as two books then. financial markets under FCA, sports stays with the gambling commission, spread betting firms already do both sides
lobbying for an exchange license right as you raise 1b at a 20b valuation is not subtle at all. regulators read the FT too lol
a 20b valuation with france, belgium and czechia locked out is basically a bet on ESMA folding. bold, but look how MiCA ended up softer than the first drafts
The July guidance already hints at the catch. Even with MiFID treatment, the EU binary-options restrictions could still apply, so Polymarket wins the label but keeps the limits.
the binary options cap is retail only tho. pros get full access, and most of polymarkets real volume already comes from semi pro traders who would qualify anyway
even semi pros get screened under MiFID suitability rules tho. the volume that made polymarket loud came from accounts that would fail those checks, nobody wants to say that part out loud
asking to be supervised like a stock exchange while running weekly meme markets on the same book. fair pitch honestly, but the gambling commission keeping sports makes it two regulators either way