Polymarket is stepping up discussions with regulators in Europe and the UK as it looks for financial-services regulation for its prediction contracts instead of being treated mainly as a gambling platform.
The New York-based company has reportedly spoken with regulators in London, Brussels, and several European countries about getting a license. Polymarket wants its contracts to be treated more like financial derivatives under rules such as Europe’s Markets in Financial Instruments Directive, or MiFID.
The push comes as Polymarket expands internationally and looks to raise around $1 billion at a valuation above $20 billion. The company believes financial-market regulation could be a better fit for its products than the gambling rules used in several European countries.
Polymarket has been in discussions with the European Securities and Markets Authority (ESMA) and the European Commission, as well as national regulators.
ESMA chair Verena Ross reportedly met with two members of Polymarket’s U.S. legal team in June. A Paris-based lawyer and a Brussels-based lobbyist also attended the meeting. The following day, Polymarket executives met with UK Financial Conduct Authority chief executive Nikhil Rathi.
The company is trying to show European regulators that its contracts can operate under MiFID rules, which cover investment firms and financial instruments across the European Union.
However, even if Polymarket receives treatment under financial-services rules, that would not automatically mean it could freely offer its products to European retail customers. ESMA has warned that some event-based contracts could qualify as financial instruments under MiFID II, which could bring existing restrictions on binary options into play.
Polymarket said it is committed to working with regulators as it expands around the world. The company has also joined Blockchain For Europe and started discussions with other industry groups.
The regulatory situation is complicated because European countries have taken different approaches to prediction markets.
France, Germany and Italy have treated many prediction markets as gambling services that require local licenses. France has already taken action against Polymarket by ordering internet providers to restrict access to the platform after authorities classified it as an unauthorized gambling service.
The Czech Republic also ordered internet providers to block Polymarket after its finance ministry classified the platform as an unauthorized internet game.
ESMA, however, is looking at whether some prediction contracts can fall under existing financial-market rules. Its guidance says companies offering event-based contracts need to determine whether individual products qualify as financial instruments under MiFID II.
These contracts can cover many different types of events, including financial markets, sports, elections, economic decisions, entertainment awards and weather.
ESMA has also raised concerns about insider trading risks as prediction markets grow and offer more contracts.
The UK has its own regulatory split. The Financial Conduct Authority oversees certain prediction contracts connected to financial events and some climate-related outcomes. Political and sports prediction markets fall under the Gambling Commission instead.
The UK has banned the sale of binary options to retail customers since 2019. The FCA has said these products can be highly speculative and can expose consumers to significant losses.
The FCA has recently discussed whether some financial prediction products should become available to retail investors again, but no formal rule change or timetable has been announced.
For Polymarket, this means the UK could require different regulatory approvals depending on what type of event a contract covers.
At the same time, Polymarket is preparing for another major funding round. The company has reportedly been discussing around $1 billion in new funding at a valuation above $20 billion.
A proposed investment led by 1789 Capital would reportedly value the company at around $21 billion. The investment firm has previously invested about $200 million in Polymarket.
Intercontinental Exchange, the parent company of the New York Stock Exchange, has also invested heavily in Polymarket, including a $1 billion investment in October 2025 and another $600 million investment in March 2026.
Polymarket has also been working on regulated access in the United States. Its U.S. operation runs through QCX, a Commodity Futures Trading Commission-designated contract market that Polymarket acquired as part of its return to the American market.
In Europe, however, the company still faces a mix of financial-services and gambling rules. Even if some contracts qualify as financial instruments, existing restrictions could still limit access for retail users.
ESMA and the FCA did not comment on Polymarket’s latest regulatory discussions.
