EU regulator says Polymarket and Kalshi lack authorization for EU event contracts
The European Securities and Markets Authority (ESMA) said Polymarket and Kalshi lack EU authorization to offer event contracts to users in the bloc. The regulator published the notice Thursday, September 11. ESMA questioned whether the platforms' partial geographic restrictions adequately comply with European market rules. The regulator noted that event contracts can qualify as financial instruments under MiFID II. The same report also flagged manipulation risks in prediction markets.
ESMA's authorization warning turns geographic blocking from a technical fix into a potential compliance failure. Polymarket and Kalshi must now prove their EU geofences are airtight or face member-state enforcement that their CFTC registrations do not block. The regulator's MiFID II reference opens a path to treating event contracts as regulated financial instruments, not gambling-adjacent products.
National supervisors in Germany, France, and the Netherlands have the authority to act on ESMA signals without waiting for new EU-wide rules. Platforms that relied on passive geo-blocking may need to build active user verification and transaction monitoring. European banking and data partners will price this uncertainty into any distribution deal. The first national enforcement action would set the template for cross-border contract bans that fragment liquidity ahead of any harmonized regime.
ESMA has now flagged Polymarket and Kalshi for both lacking EU authorization and posing manipulation risk, as Brussels shifts prediction markets from unnoticed to actively surveilled.