The European Lotteries (EL) has issued a call for a coherent regulatory approach across Europe to address the growing prominence of prediction markets. Released in Brussels on September 30, 2026, the statement emphasizes that emerging products must not create loopholes or regulatory arbitrage that could undermine consumer safeguards.
Navigating Financial Services and Gambling Regulation
Prediction markets allow users to take positions on future outcomes, ranging from elections and economic indicators to sports events, through “event contracts”. EL asserts that the regulatory treatment of these markets should depend on their legal characteristics, economic substance, and associated risks rather than the marketing terminology or underlying technology used.
Under current European frameworks, event contracts qualifying as financial instruments under the Markets in Financial Instruments Directive (MiFID II) fall under financial rules, while others are governed by national gambling laws. Crucially, qualification as a financial instrument does not exempt a product from national gambling legislation. Because gambling regulation remains a national competence, legality must be assessed on a jurisdiction-by-jurisdiction basis, making cooperation between financial and gambling authorities essential.
EL also stresses technological neutrality, noting that advancements like distributed ledger technology (DLT), blockchain, and tokenisation should not alter regulatory evaluations.
Industry Perspectives
EL Secretary General Piet Van Baeveghem stated:
“Prediction markets are developing rapidly, and regulation should keep pace. EL’s position is simple: activities that present similar risks should be subject to similar safeguards. The focus should be on the nature of the product and activity, rather than the label or underlying technology attached to it.”
Van Baeveghem added:
“We welcome the recent statement by the European Securities and Markets Authority (ESMA), which explicitly recognises that event contracts may also constitute betting under national gambling law. This underlines the importance of close coordination between financial and gambling authorities to ensure a coherent regulatory approach.”
Ultimately, EL believes prediction markets should stay within the existing European regulatory architecture, with policymakers prioritizing consistent enforcement and application.
