The European Securities and Markets Authority issued a public statement on 3 July confirming that prediction market contracts with binary financial outcomes tied to MiFID II-covered asset classes already fall under the EU’s 2018 prohibition on binary options – adding a financial-markets enforcement vector to the gambling-law campaign that nine European regulators launched in June.
ESMA addressed the statement to firms and national regulators across the EU. It defines event contracts as products offering a fixed payout or nothing, contingent on a yes-or-no question about a future event, and states that where the underlying variable involves interest rates, currencies, commodity prices, financial indices, or economic and climatic variables such as inflation or freight rates, the contract qualifies as a derivative regardless of how it is marketed. A product marketed as an event contract cannot escape classification as a binary option simply by avoiding that name, ESMA said, and any firm offering investment services linked to such contracts requires MiFID II authorisation even when serving only non-retail clients.
Second Front, Same Targets
The statement creates no new law. It confirms that an existing prohibition – in force since 2018 under national measures implementing ESMA’s product intervention – already applies to this product category. The practical effect is that prediction market operators now face two classification questions simultaneously: whether their contracts constitute unlicensed gambling under national law, and whether they also constitute a regulated derivative under MiFID II. Both tests can apply to the same product, and neither turns on how a platform describes itself.
ESMA’s statement lands sixteen days after Belgium, France, Germany, Italy, the Netherlands, Poland, Portugal, Spain, and Switzerland signed a coordinated declaration pledging enforcement action against unlicensed prediction market platforms for the duration of the World Cup. That declaration warned that the products’ combination of visibility, accessibility, and viral design creates a significant addictive cycle. Spain’s Dirección General de Ordenación del Juego had already moved earlier, ordering internet providers to block Kalshi and Polymarket on 26 May while it investigates whether their contracts amount to unlicensed gambling under Spanish law.
ADI Predictstreet and the Gibraltar Question
The most directly exposed named operator is ADI Predictstreet, the Gibraltar-licensed platform that serves as FIFA’s official prediction market partner for the tournament. The platform sits outside the EU single market and has kept its European offering limited to sport-only contracts through UK and Irish exchange partners. Gibraltar has now approved it to expand into entertainment, culture, weather, and selected political events once the World Cup ends – precisely the kind of broader market scope that prompted both the gambling regulators’ June declaration and ESMA’s July statement.
Germany’s Gemeinsame Glücksspielbehörde der Länder has opened a formal investigation into ADI Predictstreet’s World Cup marketing and its unlicensed status in the country. The platform subsequently geo-blocked users in Germany. No prediction market platform currently holds a retail licence anywhere in the EU, which means the compliance question is not whether to adjust an existing licence structure but whether to seek authorisation – under gambling law, MiFID II, or both – or exit EU-facing activity. The broader global debate over regulatory jurisdiction for prediction markets illustrates how unresolved that classification question remains internationally, and how different the resolution looks depending on which regulator moves first.
Source: European Gaming
When he is not analysing the latest compliance updates or dissecting quarterly operator results, Florian follows Bundesliga football closely and maintains a healthy skepticism toward anyone claiming to have cracked a winning betting system. He brings a grounded, insider-aware perspective to his writing and is always more interested in the structural story behind the headline than the headline itself.