Can Prediction Markets Operate Legally in Europe?

Prediction markets exist in a regulatory gray zone across Europe. Depending on the jurisdiction, they may be classified as gambling (requiring a gambling license), financial instruments (requiring MiFID II authorization), or something in between. There is no unified EU-wide framework, and the regulatory posture varies significantly by country.

How European Regulators Classify Prediction Markets

As Gambling (Most Common)

Most European gambling regulators treat prediction markets as a form of betting — if users stake money on uncertain outcomes for potential returns, it looks like gambling regardless of whether it's called a "prediction market."

Countries with this approach:

• UK: The Gambling Commission would likely classify prediction markets as "other betting." Any platform offering real-money prediction markets to UK customers needs a remote gambling license.
• Malta: The MGA (Malta Gaming Authority) treats event-based wagering as gambling. Malta-licensed operators can offer prediction markets under their existing licenses, making Malta a natural home for European prediction market operators.
• Sweden: Spelinspektionen would classify prediction markets as gambling under the 2019 Gambling Act.
• Estonia: The Tax and Customs Board regulates online gambling and would require a license for real-money prediction markets.

As Financial Instruments

If prediction market contracts look like derivatives — binary options on events — they may fall under MiFID II and require authorization as a financial services provider.

The key distinction: If the prediction market uses continuous trading with order books (like Polymarket), it resembles a financial exchange. If it uses fixed-odds betting (like traditional bookmakers), it looks more like gambling.

Countries where this applies:

• Germany: BaFin has historically taken a restrictive view, potentially classifying prediction market contracts as financial instruments
• France: The AMF (Autorité des marchés financiers) may classify certain prediction market structures as derivatives

The Play-Money Loophole

Platforms that don't involve real money (or use virtual credits with no cash-out) generally avoid both gambling and financial regulation. This is why academic prediction markets like Metaculus (reputation-based) operate freely across Europe.

The EU-Level Picture

The EU has no specific regulation for prediction markets. However, several frameworks are relevant:

• MiFID II — Applies if contracts are classified as financial instruments
• Anti-Money Laundering Directives (AMLD) — Apply to both gambling and financial services operators
• Consumer Protection Directives — Apply broadly to any consumer-facing service
• EU AI Act — May apply to AI-driven pricing and risk management in prediction markets (classified as high-risk if used in gambling)

The practical reality: Most prediction market operators serving European customers either obtain a Malta or Curaçao gambling license, restrict access from heavily regulated markets (France, Netherlands), or operate in a gray area.

Why This Matters for iGaming Operators

For iGaming operators looking to add prediction markets as a vertical, the regulatory picture is actually clearer than it seems:

1. If you already have a gambling license in a European jurisdiction, you can likely offer prediction markets under your existing license — they're simply another form of event betting
2. The content feed approach (using a B2B API like Adkuu Pulse) reduces regulatory complexity because the operator holds the license and customer relationship, while the API provides content and resolution
3. Multi-jurisdictional operators need to configure which prediction market categories are available in each market — political betting is restricted in some jurisdictions where sports betting is fine

The 2025-2026 Regulatory Shift

Several developments are reshaping the landscape:

• Kalshi's legal victories in the US have encouraged European regulators to consider formal frameworks
• The UK Gambling Commission is reportedly reviewing whether prediction markets need specific guidance
• The European Commission has included "event-linked contracts" in its digital services review
• Arizona's criminal charges against Kalshi (March 2026) demonstrate that regulatory risk remains real and jurisdiction-specific

The direction of travel suggests that prediction markets will increasingly be regulated as gambling in Europe, which paradoxically benefits licensed iGaming operators — they already have the licenses and compliance infrastructure needed.

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Last verified: March 2026