The European Securities and Markets Authority (ESMA) has warned that major prediction markets, including Polymarket and Kalshi, generally have not obtained the necessary approvals to provide services to EU users. According to CoinDesk, ESMA released a report on the 10th (local time), stating, "Marketing and selling event contracts within the EU generally require EU approval. However, currently, the largest prediction market platforms do not hold such approvals." It added, "While Polymarket and Kalshi restrict trading in some EU countries, they exclude other member states from restrictions. It is unclear why these services are not restricted in all EU member states. This could lead to risks of providing unauthorized services and violating existing regulations on trading restrictions for retail investors." ESMA also raised questions about whether the two platforms can effectively block users who hide their actual location using a virtual private network (VPN). ESMA added, "Event contracts may be subject to existing EU binary options bans, cryptocurrency regulatory laws such as MiCA, or national gambling laws."
