Prediction Markets Under a Betting Licence: Europe's Rulebook, Q4 2026

TL;DR

For a licensed European operator the practical route into prediction markets in late 2026 is fixed-odds betting on non-financial events under the licence it already holds, checked market by market and country by country. In 2026 regulators in Portugal, the Netherlands, Spain, France and Germany blocked or penalised unlicensed prediction platforms or ruled whole classes of event bets out; the UK Gambling Commission said the exchange model needs a betting intermediary licence; ESMA confirmed that event contracts on financial underlyings are binary options barred to EU retail clients; the Malta Gaming Authority said its Type 2 and Type 3 licences may already cover these products; and Gibraltar wrote a separate authorisation. The matrix below records who said what, and when; the last section lists the questions to take to counsel.

Key takeaways

• Two lines decide most of the map: a financial underlying makes the contract a binary option under MiFID II, barred to EU retail clients (ESMA, 3 July 2026); a political event is prohibited for everyone in the Netherlands, not licensable in Germany and not permitted in Portugal.
• An exchange is a different licence from a book: the Gambling Commission said on 4 February 2026 that current products would appear to be betting intermediaries; the MGA named Type 2 (fixed odds) or Type 3 (exchange) on 14 April 2026, depending on structure.
• Blocking was the tool of 2026: Portugal in January, the Netherlands with a penalty order dated 20 January, Spain from 26 May and France from 16 July all acted against Polymarket; Spain also blocked Kalshi.
• Gibraltar's Prediction Market Regulations 2026, in force since 13 July 2026, create an authorisation that existing licensees do not receive automatically.
• A fixed-odds feed on non-financial events maps onto the licences operators already hold; classification is still confirmed per market with counsel, because the same question can be an ordinary bet in one country and a prohibited society bet in the next.

Three products share one name

"Prediction market" covers three product shapes. The first is the exchange, a peer-to-peer order book in which the platform matches users and takes a commission; Spain's regulator described this model on 26 May 2026 and the Gambling Commission compared it to a betting exchange. The second is the event contract on a financial underlying, a yes-or-no payout on a price, an index or a rate decision, which ESMA and the FCA both call a binary option. The third is the fixed-odds bet on a non-financial event, priced by the house with a margin and settled against a stated source: the shape a sportsbook already runs on sport, and the one that fits existing betting licences. What remains after that choice is a list of topic restrictions that differ by country.

The matrix

Every statement was opened on 10 October 2026. The third column is Adkuu's reading of the statement, not the regulator's words; it is the part to verify with counsel.

Dividing line one: the financial underlying

ESMA's two-page statement of 3 July 2026 (reference ESMA35-243228190-8148) defines event contracts as agreements "whose financial outcome is binary (a fixed payout or no payout at all) and depends on a yes-or-no answer to a question about a future event", then draws the line: "Not all event contracts are financial instruments. Only event contracts with an event question related to an underlying mentioned in Section C(4) to (10) of Annex I of MiFID II classify as financial instruments." Those that do are binary options, so their "marketing, distribution or sale to retail clients" is prohibited under the national measures in force in every member state, and "the commercial name provided by firms (e.g. 'event contracts') is irrelevant". A footnote adds that the rest "may also classify as a bet under national gambling legislation".

The FCA's perimeter report splits the same way: "PMPs linked to non-financial events (such as sporting or political outcomes) fall under the Gambling Commission's remit", while "Our current view is that the financial PMPs we have seen are binary options" that "remain subject to the FCA's permanent ban on the sale of binary options to retail consumers". On 6 October 2026 the FCA's markets chief Simon Walls confirmed talks with prediction-market operators, as CCN reported on 7 October 2026, with Kalshi and Polymarket said to be exploring UK entry; as of 10 October 2026 the ban stands. Any market whose question is a price, an index, a rate or a climatic variable therefore needs its own legal test before it goes live.

Dividing line two: the political event

Three regulators said in 2026 that political betting is out regardless of licence. The Dutch Kansspelautoriteit's penalty order against Adventure One QSS Inc., the company behind Polymarket, is dated 20 January 2026; its director of licensing and supervision, Ella Seijsener, said political bets "hoe dan ook niet zijn toegestaan, ook niet door vergunninghouders" (are not permitted in any case, not even for licence holders) and told NOS on 7 February 2026 that offering them "is te allen tijde verboden in Nederland" (is prohibited in the Netherlands at all times) because they can influence democratic processes. On 8 July 2026 the Ksa announced that the 420,000 euro penalty had been forfeited; an appeal remains open.

Germany's Gemeinsame Glücksspielbehörde der Länder said on 13 August 2026 that society bets "sind in Deutschland nicht erlaubnisfähig" (cannot be licensed in Germany) and that participation from Germany "ist daher nicht zulässig und kann strafbar sein" (is therefore not permitted and can be punishable). Portugal's SRIJ gave Polymarket 48 hours from Friday 16 January 2026, two days before the first round of the presidential election, to cease activity; Observador reported on 19 January 2026 that the regulator said the platform had no authorisation and that betting on political events, national or international, is not permitted; more than 4 million euros had been placed in the hours before results were known, on a market whose total volume The Block put above 110 million euros and Observador at about 103 million.

The rule that follows: an operator switches the politics category off for Dutch, German and Portuguese players before launch, and the question goes to counsel everywhere else, including Spain, whose note lists elections among the subjects the blocked platforms covered without saying how a licensee would be treated.

Exchange or book: Great Britain and Malta

The Gambling Commission's post of 4 February 2026, by its director of strategy Brad Enright, says products meeting the legal definition of gambling "must be licensed and regulated by the Gambling Commission", that current prediction-market products "would appear" to be betting intermediaries, that their core features resemble a betting exchange, which has operated in Britain since 2000, and that "the betting intermediary gambling licence exists to cover such business models". The post addresses the exchange model and says nothing new about fixed-odds bets on non-sport events.

Malta was the most explicit about the fixed-odds route. On 14 April 2026 an MGA spokesperson told iGamingCapital.mt that the framework is "technology-neutral and therefore sufficiently flexible to accommodate such offerings" and that prediction markets may fall under a "Type 2 (fixed odds betting) or Type 3 (peer-to-peer/exchange-based betting) licence", while the Authority assesses whether some features need "a differentiated regulatory approach". Yogonet reported on 11 June 2026 that the Prime Minister plans to give the MGA powers to license the segment. Until then, the Type 2 and Type 3 split is the clearest written statement in Europe that a fixed-odds product and an exchange are different licences.

Gibraltar, and a lesson from ADI Predictstreet

Gibraltar wrote a regime. The Prediction Market Regulations 2026 (LN.2026/176) came into force on 13 July 2026 under sections 34 and 159 of the Gambling Act 2025, according to an ISOLAS LLP briefing of 14 July 2026: authorisation is "granted by the Licensing Authority" where the Schedule 2 conditions, including substantive presence, are met; existing licensees "will not automatically be entitled to carry on prediction market activity"; only contracts "approved by the Authority, or certified under approved arrangements" may be listed; and digital-asset payments "including stablecoins" are permitted. iGB reported on 10 June 2026 that ADI Predictstreet had been the first prediction market licensed there, in March, and quoted Gambling Commissioner Andrew Lyman: "The jurisdiction has the agility to flex as we learn to accommodate different models."

ADI Predictstreet's route to British customers is 2026's most instructive detail. It launched in the UK and Ireland in June 2026 on the Matchbook exchange with no Gambling Commission licence of its own: Yogonet reported on 16 June 2026 that it operates under the licence of Matchbook's parent Triplebet, and an SCCG note of 11 June 2026 says the Commission's register lists it as a domain covered by Triplebet's existing licence. The product is sports-only, with Yes/No contracts. A "licensed prediction market" reached Great Britain through an existing betting licence.

Blocking, and the condition attached

Spain's 26 May 2026 notice, published in the Official State Gazette after direct notification abroad failed, gives the clearest European definition on record, prediction markets as games of chance "cuando se apuesta sobre resultados futuros inciertos" (when bets are placed on uncertain future outcomes), and faults unauthorised operators for lacking identity verification and controls for minors and self-excluded players; France's ANJ, which blocked Polymarket on 16 July 2026 after an earlier geoblock "has been circumvented", found no identity checks at all. The national licence is the gate and the licensee's own protections are the reason for it; a feed has to run through them like any other product.

The US, as contrast

Nothing in Europe resembles the American fight over who owns sports event contracts. DLA Piper's tracker of 2 September 2026 records a CFTC proposed rule on 10 June 2026, CFTC lawsuits against six states, a joint letter from 44 states, and a 3–0 Ninth Circuit ruling on 28 August 2026 that sports event contracts are not "swaps", splitting with the Third Circuit; CoinDesk reported on 25 September 2026 that the Sixth Circuit reached the same conclusion for Ohio and Tennessee and that New Jersey has asked the Supreme Court to hear the Third Circuit case. In Europe that question is settled the other way; the open points are topic and product shape.

What this means for a fixed-odds feed

Adkuu Pulse is built for the third product shape. For every market it delivers an AI probability shaped by a risk model (flow-weighting, liability, staleness, circuit breakers), then fixed odds priced with a margin formula the operator controls. Because it is fixed-odds, in Adkuu's model it sits inside an operator's existing sports-betting licence rather than requiring an exchange licence; the same feed can also power a peer-to-peer exchange, which in Great Britain and Malta is a different licence conversation. Adkuu does not describe the product as legal in any named country: classification is confirmed per market with counsel, which in practice means the operator switches the politics category off for the Netherlands, Germany and Portugal and tests a crypto-price question against ESMA's Annex I list before it ships. See the Adkuu Pulse page, Can prediction markets operate legally in Europe? and, for the published numbers, What prediction markets do to a sportsbook's numbers.

What to take to counsel

1. Which event categories count as betting under our licence types, per country, with the statute?
2. Does our licence permit fixed-odds bets on non-sport events at all? Malta has said Type 2 covers fixed odds; most regulators have not written an answer down.
3. Which proposed markets have a financial or climatic underlying under MiFID II Annex I Section C(4) to (10), and must be excluded for retail?
4. Which of our countries prohibit political betting for licensees, as the Netherlands, Germany and Portugal have in writing?
5. If we add an exchange mode, which licence applies (betting intermediary in Great Britain, Type 3 in Malta)?
6. Does the supplier's per-market classification and geofencing give us an audit trail a regulator will accept?
7. Who carries the exposure if a market is later found to be a prohibited category in one of our countries?
8. If we hold a Gibraltar licence, which of our markets are "prediction market activity" under the 2026 Regulations?

FAQ

Can a European sportsbook offer prediction markets under its existing licence? In fixed-odds form, on non-financial events, that is the route regulators have pointed at: the MGA named its Type 2 licence for fixed odds on 14 April 2026, and the FCA's perimeter report assigns non-financial event contracts to the Gambling Commission's regime. Which topics are allowed differs by country, and each market's classification is confirmed with counsel.

Why did Spain, France, Portugal and the Netherlands act against Polymarket in 2026? Each regulator said the platform offered gambling without the national licence. Spain also cited missing identity checks and protections for minors and self-excluded players, France the absence of identity checks; the Netherlands and Portugal said political betting is not permitted at all.

Are prediction markets financial instruments in the EU? Only those whose question relates to an underlying in MiFID II Annex I Section C(4) to (10), per ESMA's statement of 3 July 2026. Those are binary options and cannot be sold to retail clients in any member state; contracts on sport, politics or culture fall to national gambling law.

Is political betting banned across Europe? No. It is prohibited for everyone in the Netherlands, not licensable in Germany and not permitted in Portugal, by each regulator's own 2026 statement. Elsewhere it depends on the national licence.

Sources

• Prediction markets - here's what you need to know — Gambling Commission
• Public Statement on the application of the national product intervention measures on binary options to event contracts — ESMA
• FCA perimeter report — Financial Conduct Authority
• Consumo abre expediente sancionador y ordena cautelarmente el bloqueo de Polymarket y Kalshi, dos plataformas de mercados de predicción — Ministerio de Derechos Sociales, Consumo y Agenda 2030
• Promotion of illegal gambling services: blocking of the Polymarket website — ANJ
• Last onder dwangsom voor illegaal kansspelaanbod Polymarket — Kansspelautoriteit
• GGL informiert über rechtliche Risiken von Gesellschaftswetten und Prognosemärkten — Gemeinsame Glücksspielbehörde der Länder
• Gibraltar Introduces Bespoke Regulatory Framework for Prediction Markets Under Gambling Act 2025 — ISOLAS LLP via The Legal 500
• Prediction markets fit within MGA rules, but changes possible — iGamingCapital.mt
• Legal status at odds: Tracking developments in prediction markets and sports betting — DLA Piper

Last verified: October 10, 2026.