Will prediction markets come to Europe?

Prediction markets and associated court actions continue to dominate the conversation in the U.S. and elsewhere. With a legal position in what may kindly be described as a state of flux, interest shows no sign of waning. Many commentators have predicted that it is only a matter of time before prediction markets make their entry onto European markets and further afield. In this article we review how likely that is and what barriers operators in the space would have to overcome and whether, indeed, they are already there.

Defining terms

Before considering whether prediction markets are legal in various European jurisdictions and in the EU as a whole, we first have to define the product and consider where it would sit in markets outside the U.S.

Prediction markets in the U.S. are exchange platforms where individuals can acquire a financial interest in the outcome of future events. It has long been possible for those who stand

to gain or suffer loss to hedge against the future price of a commodity or the likelihood of a weather event. In the case of commodities, trades can be made without the physical assets being owned.1 As financial instruments, it makes perfect sense for these trades to be regulated by a financial regulator, the Commodity Futures Trading Commission (CFTC), which defines them as Event Contracts.

One could be forgiven for thinking that prediction markets being offered on political and sporting events started with the 2024 presidential election and hit the mainstream with the NFL Super Bowl LIX. In fact, data from individuals betting on the outcome of events predated opinion polls by many decades. Betting data accurately predicted the result in the majority of

U.S. presidential elections between the late 1880s up to 1940.2 Indeed, it was only the rise of strict anti-gambling laws in the 1930s that allowed scientific polling to emerge.3 There are still many who consider the views of individuals with some “skin in the game” to be a better predictor of outcomes than opinion polls.4

One key characteristic of U.S. prediction markets is their peer-to-peer nature. Traders use the platform to find a counterparty rather than receiving odds from the house. In this respect, they are very similar to UK betting exchanges, with the crucial difference being that, in the UK, they are regulated by the UK Gambling Commission (more on this later).

In the U.S., prediction markets operators fall into two categories: those, like Kashi, who are trying to show they offer a legal, regulated product; and those, like Polymarket, which is an offshore crypto-based prediction market operator.

On a side note, the nature of trades or contracts is such that their value changes as the probability of an outcome rises or falls. Price fluctuations are the result of the collective brain changing its mind as new information emerges. Every time a trader buys or sells it removes or adds trades to the pool, affecting their price.

A novel feature of prediction markets is that a position can be cashed in before the eventual outcome is determined, giving trades an in-play element. Events at the 2026 Australian Open tennis men’s semi-final shows just how wild these fluctuations can be. In the match, a 5-set epic between veteran Novak Djokovic and Jannik Sinner, momentum swung repeatedly between the two players. At one point, Kalshi’s price went from

¢76-¢26 in favor of the Serb to ¢33-¢67 just seconds later.5 With around US$12 million being staked, there would appear to be enough liquidity to make a sizeable speculative profit, and no one can question the thrill of such a wild ride. There are also emerging bet builder-type mechanics which allow for accumulator or parlay-style bets to be placed.

In summary, prediction markets offer individuals the chance to do things that were once recognized as betting in the U.S. and which are still recognized as betting in other markets, and with some characteristics of sophisticated mainstream sports betting. The main difference with prediction markets, which their promotors point to to argue against them being defined as sports betting, is that they use platforms and language more akin to that of financial trading. This, they claim, provides a different user experience and will appeal to a

different audience. In legal filings against the CFTC and state regulators, Kalshi’s lawyers have built a documented history of this different audience claim.6 All of this is not an attempt settle the legal arguments; just to define the product which could soon be making an appearance in Europe.

Transposing prediction markets to Europe

Market conditions have made prediction markets a success in the US but what chance they will come to Europe?

United Kingdom (and Ireland and Austria)

Whilst they are positioned differently, prediction markets are already quite established in the UK. Sports bets are the dominant trades on betting exchanges, but the UK has some of the world’s most liquid markets for politics (e.g., General Elections, next Prime Minister) and current events (e.g., interest rate changes, Oscar nominees/winners).7

The Gambling Commission (UKGC), the UK regulator confirmed this view in a blog post.8

“Subject to the specific business model a ‘prediction market’ operator wished to offer in Great Britain, it would appear current products would fall within the definition of a ‘Betting Intermediary’ under UK legislation. Whilst the presentation of prediction markets may differ, their core aspects are akin to what in the UK would be described as a ‘Betting Exchange.’ The betting intermediary gambling licence exists to cover such business models.”

They went on to say: “If a prediction market operator was to launch here in Great Britain, we do not believe they would be able to classify themselves as [offering] non-gambling products.”

In practice, this means that a platform would need to obtain a Gambling License, a requirement of which are strict KYC checks and AML protections. This would seem to go against the anonymous, crypto-native nature of many decentralized prediction markets.

There are a couple of other reasons why Kalshi et al may struggle to gain a foothold in the UK. The first is a regulatory split in the form of the Binary Options ban. In 2019, the Financial Conduct Authority (FCA) banned the sale of binary options to retail consumers. Because many prediction markets would technically fall under the definition of binary options, they cannot be marketed as financial trading products to consumers.

The second reason concerns taxation: In the UK, gambling winnings are tax-free, a huge advantage for users. To retain this advantage platforms must stay strictly within the definition of gambling preventing them from being integrated into financial apps or pension portfolios.9

Although the UK seems well served by prediction market-style products, that is not to say that developments in the U.S. are not having an impact. As of Q2, 2026, UK betting exchanges were starting to restyle their user interfaces to mimic U.S. platforms. Matchbook launched a dedicated prediction market interface focusing on politics and entertainment with a simple yes/no percentage-based user interface much like Kalshi’s.10

Ireland is taking a similar view to that of the UK saying that prediction markets “bear the hallmarks of betting activity” and thus require a betting license. Applications opened in February 2026 with the first licenses expected by July 2026.

The position in Austria is somewhat more complex although most prediction market offerings are legally unproblemtic11 and would be licensed as betting by Ministry of Finance. Certain bets are prohibited and markets on these outcomes would remain off limits. If prediction markets strayed too far towards financial instruments, they would fall foul of Austria’s Financial Markets Authority which bans the marketing of derivative products to consumers

European Union

The situation in the rest of Europe is much more restrictive and fragmented than in the UK with many European nationsviewing prediction markets as a form of unregulated gambling that needs to be shut down.

Several major EU countries have taken aggressive action against international prediction platforms like Polymarket. Because these platforms often operate via blockchain and do not hold local gambling licenses, they have faced bans in a number of member states:

• France: Typically quick off the mark, the National Gaming Authority (ANJ) officially banned Polymarket in late 2024/2025.12 France reinforced its opposition to prediction markets in a statement in February 202613 drawing attention to characteristics it claimed were particularly addictive.
• Portugal and Hungary: these two countries joined France by banning Polymarket in January 2026. Portuguese regulators specifically noted that betting on political events is prohibited under its national law.14
• Belgium & Romania: Both countries have blacklisted prediction market domains, ordering internet service providers to block access for their citizens.
• Poland: The Ministry of Finance added several prediction market sites to its Register of Illegal Gambling Domains.
• Netherlands, Germany, Greece and Cyprus: All four have bans of one kind or another on prediction markets

The biggest change anticipated in 2026 is the full implementation of the Markets in Crypto-Assets Regulation (MiCA) across the EU.15 This creates a fork in the road for prediction markets with operators given a choice between a gambling path or a financial path.

The gambling path: If a platform wants to offer yes/no bets on the events like the Oscars or political elections, they will have to obtain a gambling license in each of the 27 EU member states: an expensive and difficult task. It is made even more unattractive by the culture in many EU countries whose populations view betting as something strictly for sport or horse racing.

The financial path: Some newer platforms are trying to use MiCA to register as Crypto-Asset Service Providers (CASPs). This would allow them to passport their services across the whole EU under one license, thus avoiding the fragmentation of gambling license regimes. However, similar to the UK, the European Securities and Markets Authority (ESMA) has instituted a ban on binary options for retail investors unless a platform can prove they are not gambling dressed up as finance. Trades are also restricted to non-political markets (e.g. commodity prices or economic data) for the most part to avoid being classified as gambling.

In Europe there are also tax disincentives to structuring gambling as an investment. As in UK, there is typically no tax levied on winnings, but gamblers may find their winnings from prediction markets qualify as trades and are subject to income tax. There is also no capital gains regime for gambling in most of Europe. Unlike the US, prediction market losses cannot easily be written off against other investment gains, making them less attractive to professional traders and more for punters.

The future of prediction markets in the EU is not without regulatory and cultural hurdles but this has not prevented Kalshi from opening an EU division. Whilst it will likely look to expand aggressively, the bigger future may lie in institutional forecasting. This would allow institutions to gain exposure to events for which their own (increasingly AI-driven) data can forecast outcomes.

Malta

Despite being a full EU member, Malta deserves a special mention of its own. The MGA already has a framework for licensing betting exchanges and, in May, 2026, the country’s economy minister declared his ambition to regulate prediction markets. Whether a Maltese license would enable prediction market operators to offer them more widely across Europe certainly has to be considered as a possibility. Developments discussed elsewhere in this edition indicate that the window may be closing on this opportunity but it remains ajar.

Non-EU Europe

Outside of the UK and EU, Europe is a mixed picture. Some countries are leading the way in “financializing” these markets, while others treat them as strictly illegal gambling.

Switzerland: the pragmatic approach16

While strictly controlling gambling, the Swiss are very open to financial innovation. Responsibility for financial regulation, market integrity, AML etc. resides at the federal level with FINMA, whereas sports betting is regulated by GESPA, an inter-cantonal regulator which issues licenses and looks at issues like problem gambling and player protection. The distinction is important because the Swiss Gambling Act expressly states that financial market activities will be regulated by FINMA, whether or not they are exempted from the scope of the Act. Platforms like Polymarket have been blocklisted by GESPA because they offer sports betting products without a Swiss gambling license.

Prediction markets fall outside the current licensable categories. Sports betting can be licensed, however, it is mostly the preserve of public sports betting monopoly, Swisslos. An operator might argue that there is a high degree of skill involved such that it would qualify as a skill game but otherwise, prediction markets could not be licensed as a gambling product.

Swiss residents can legally trade event contracts through regulated financial brokers. ForecastEx is one service in Switzerland that treats the trades as financial derivatives rather than bets keeping it in a safer legal category. It may be worth the trouble as gains are typically treated as capital gains (which are generally taxed at zero percent for private individuals in Switzerland).

Norway: the state monopoly

Norway is one of the toughest markets in Europe for prediction platforms with the country’s Gaming Scheme Act of 2022 outlawing the provision, marketing, or payment facilitation of any form of gambling activity without authorization.17 The country maintains a strict state monopoly on gambling, with Norsk Tipping having sole rights to provide online betting. Any prediction market that isn’t sports-focused and state-sanctioned is generally considered illegal.

The Norwegian Gaming Authority is known for being aggressive with black market operations using DNS and payment blocking to hamper unlicensed prediction sites or crypto-based betting platforms.

Turkey: crypto converts

Turkey has become a hub for prediction markets, largely driven by the population’s high adoption of crypto.18 While the country has strict gambling laws, the government has historically focused more on regulating crypto exchanges than individual prediction market users.

In 2025, Turkey emerged with one of the largest user bases for decentralized prediction markets. Users trade using stablecoins bypassing local banking restrictions.

Ukraine & Russia

Before 2022, Ukraine was in the process of liberalizing its gambling laws. However, under martial law and recent pivots toward tighter financial controls, many unlicensed international platforms have been restricted to prevent capital flight. The country has earmarked growth in the gaming sector as part of its recovery in a post-war period but how open this will be remains to be seen while the conflict persists

Prediction markets (especially those predicting political outcomes) are strictly prohibited in Russia as are online casinos and some other forms of gambling. The government blocks access to these sites via its communications regulator, Roskomnadzor, and using them can carry significant legal risks for residents. A recent attempt by the Russian Finance Minister to legalize online casinos as a way to boost state revenue suggests they are very alive to leakage of tax revenues offshore.19

Beyond regulation

As noted, although there are regulatory obstacles to  Prediction  Markets  and  their  promoters setting up shop in European markets, that is not preventing the larger players from dipping their toes into the water. Depending on the way local regulations are framed it is not impossible for prediction market mechanics to be tweaked in ways that would see some equivalent clear the legal bar. However, it is an open question as to how successful any such launches might be.

Whilst many US regulators have been vocal in demanding that state regulation should not apply when it comes to any forms of gambling, it is not clear they are worried too much about a challenge in their own markets. Indeed, some attendees to the joint IMGL-IAGR masterclass held during ICE admitted that, while prediction markets overall have made a splash, much of that could be accounted for by California and Texas i.e. the two largest unregulated markets.

Products that are engineered as regulation-avoiding substitutes tend to be successful only where consumers are kept away from the real thing. In a sensible and sustainable regulatory and tax environment, licensed sports betting and casino games will normally win out.

For the most part, despite a different interface and some novel features, prediction markets are not really offering anything genuinely different from online sports betting and especially betting exchange. Where they are it is at least as likely that established players will incorporate these features rather than lose out to US imports. The exceptions are operators like Polymarket with their acceptance of crypto bets. These are growing in popularity, particularly with younger gamblers. As with product-types and game play dynamics, when the regulated market is prevented from keeping up with consumer demand, the black market is handed an advantage.

1. https://www.aeaweb.org/articles
2. https://www.biancoresearch.com/betting-on-elections/
3. https://www.pbs.org/fmc/segments/progseg7.html
4. https://www.researchgate.net/publication/393685505_Are_Betting_Markets_Better_than_Polling_in_Predicting_Political_Elections
5. https://sigma.world/news/kalshi-win-totals-market-expanding-sports-footprint/
6. KalshiEX LLC CFTC (D.C. Cir. 2024) and Commonwealth v. KalshiEX LLC (MA Superior Court, 2026).
7. https://traderline.com/education/betfair-liquidity-guide
8. https://www.gamblingcommission.gov.uk/blog/post/prediction-markets-heres-what-you-need-to-know
9. https://taxfix.com/en-uk/blog/do-you-pay-taxes-on-gambling-winnings/
10. https://www.ukbookmakers.org.uk/2026/01/matchbook-confirms-first-uk-prediction-market-but-how-will-it-be-regulated/
11. Prediction Markets: Between Betting, Financial Instruments and Digital Information Markets Christian Rapani / Felix Hohenthanner
12. https://docs.polymarket.com/polymarket-learn/FAQ/geoblocking
13. https://anj.fr/plateformes-de-marches-de-prediction-des-sites-illegaux-en-france-qui-peuvent-presenter-des-risques
14. https://www.lexology.com/library/detail.aspx?g=fed6d04b-1b54-460d-88a2-746779b6bc89
15. https://www.legalnodes.com/article/mica-regulation-explained#
16. Gleaned from Simon Planzer’s comments at the IMGL-IAGR Masterclass, ICE Barcelona, January 2026
17. https://www.lexology.com/library/detail.aspx?g=a55c1803-1f49-4253-b863-11ea40ee25ef
18. https://practiceguides.chambers.com/practice-guides/blockchain-2025/turkey/trends-and-developments
19. https://igamingbusiness.com/gaming/online-casino/russian-finance-ministry-asks-putin-to-legalise-igaming/

Phil Savage is head of publications and European affairs at IMGL