ESMA confirms prediction-market contracts fall under EU rules

ESMA has confirmed that some prediction-market contracts fall under European financial regulation. The EU's financial regulator issued a firm warning to companies operating prediction markets, clarifying that those businesses cannot assume prediction contracts are outside existing financial rules.

The regulator's clarification states that certain contracts used in prediction markets are covered by existing binary options restrictions, effectively bringing those contracts into the same regulatory framework as binary options. That wording makes clear some prediction contracts will be treated under already established binary options rules.

The guidance applies to the EU market, according to iGaming Business. The firm warning underlines the regulator's stance on classification of those contracts. The announcement serves as a clarification for companies operating prediction markets.