ESMA flags EU authorization gaps for both platforms

EU authorization comes into focus

Polymarket and Kalshi may lack the authorization required to operate in some EU jurisdictions, the European Securities and Markets Authority warned this week, according to weebet.com, citing CoinDesk. The concerns span restrictions on binary options, MiCA crypto-asset requirements and gambling rules set at the national level.

The warning leaves European users facing uncertainty over continued access. According to weebet.com, a determination that event contracts are regulated financial instruments or gambling products could lead to restrictions or shutdowns on short notice. The report does not describe a final classification decision.

Multiple regulatory paths

The binary-options issue draws on an existing enforcement framework: weebet.com reports that EU regulators used it to block a wave of retail CFD products after 2018. MiCA, which took full effect in December 2024, presents an additional compliance question for platforms that settle contracts in crypto.

Both platforms substantially increased their European user bases in 2026 amid interest in political and macroeconomic contracts, according to weebet.com. As of September 2026, neither held an EU-wide financial services license. Both maintain that their contracts sit outside existing regulatory boundaries.

Weebet.com interprets ESMA’s involvement as a sign that national competent authorities have brought their concerns to the EU level. It also reports that ESMA is expected to issue formal guidance explaining how existing regulatory frameworks apply to event contracts, followed by a defined period for platforms to seek authorization or leave affected markets.

For users, the potential consequences extend beyond whether new trades remain available. According to weebet.com, regulatory intervention could also freeze funds or limit withdrawals where authorization is lacking.

What it means for prediction markets

• Classification is the key uncertainty. Treatment under financial-instrument rules, MiCA or national gambling laws could produce different authorization requirements and access restrictions.
• Guidance would be a concrete next milestone. The anticipated ESMA clarification could establish a timetable for authorization applications or exits from affected markets.
• Access and funds are separate risks. The report flags possible trading restrictions as well as frozen funds or limited withdrawals; it does not establish that those measures have been imposed.