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EU Regulator Warns Prediction Markets May Face Retail Binary Options Ban

1 reports · First detected 2026-07-05 · Last active 2026-07-05

Prediction markets settle contracts based on yes-or-no outcomes for future events, giving investors either a fixed payout or no return. If an event contract is deemed a financial instrument based on the question it poses, it is classified as a derivative. Several EU countries have replaced ESMA’s temporary ban with permanent measures since 2019, making Kalshi’s and Polymarket’s ability to serve retail clients critical to their continued presence in Europe.

The European Securities and Markets Authority (ESMA) said on July 3, 2026, that companies must assess event contracts individually. Any binary contract that qualifies as a financial instrument may not be marketed, distributed or sold to retail clients. Firms offering such contracts exclusively to non-retail clients must still obtain authorization as investment firms. Kalshi and Polymarket could be forced to modify their products or exit the market, while national regulators are set to strengthen cooperation on cross-border enforcement.

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1 original reports
ABMEDIA.IO 2026-07-05
歐盟 ESMA 警告：Kalshi/Polymarket 或適用散戶禁令

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The history behind this event
Dutch Users Continue to Access Crypto Prediction Markets After Polymarket Ban2026-05-05 · 1 reports · similarity 0.80

Prediction markets allow users to wager through contracts on the outcomes of elections, sporting contests and other events, but they may be treated as regulated gambling in the Netherlands. The Dutch Gambling Authority (Ksa) blocked Polymarket in February 2026 for operating without a gambling license, highlighting the challenges of cross-border enforcement and investor protection involving decentralized platforms.

An investigation by Dutch financial newspaper FD found that, as of May 5, 2026, users in the Netherlands could still trade prediction contracts through Kalshi, Hyperliquid and Interactive Brokers. Hyperliquid has also recently expanded its local services. The Ksa warned that similar platforms could face penalties, while an April study by London Business School found that only 3% of participants were consistently profitable and nearly 70% lost money.

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