Record Participation for EL’s Webinar on Prediction Markets

New technology, familiar questions

Prediction markets allow users to trade contracts linked to the outcomes of future events, from elections and economic developments to sports competitions. While often presented as financial products, their mechanics can closely resemble those of traditional betting exchanges. The distinction is therefore not always as clear-cut as the label suggests.

Christian Kalb examined how these platforms operate and the challenges they pose for regulators. The fundamental question is whether prediction markets should be classified as financial instruments, gambling products or potentially both. That classification determines which rules apply and what safeguards users can expect.

Glenn Yamagata explored the evolving situation in the United States, where disputes between federal and state authorities have triggered a series of legal challenges. The US experience highlights how fragmented oversight can create regulatory uncertainty and give operators incentives to favor frameworks with fewer obligations.

Finding the right regulatory balance in Europe

Turning to Europe, Claire Pinson-Bessonnet examined the interplay between financial regulation, national gambling legislation and the EU’s Markets in Crypto-Assets Regulation (MiCA). As these frameworks evolve, their interaction raises concerns about potential circumvention of national gambling rules, particularly for products built on blockchain technology.

The Italian experience offered a practical illustration. Luca Turchi outlined the Italian Customs and Monopolies Agency’s actions concerning Polymarket and its conclusion that the platform’s activities are functionally comparable to betting under Italian law. The ongoing case underlines a key principle: using blockchain, cryptocurrency or peer-to-peer mechanisms does not automatically place an activity outside the scope of gambling regulation.

Across the presentations, speakers also highlighted risks including gambling-related harm, insider trading and market manipulation. These concerns reinforce the need for effective oversight that reflects the substance and risks of a product rather than simply how it is presented.

A shared challenge for the lottery sector

The discussions build on EL’s position paper on prediction markets, which argues that regulatory classification should be based on a product’s actual nature, characteristics and risks. Technological innovation should not fundamentally change that assessment.

EL also stresses the importance of preserving Member States’ competence to regulate gambling within their territories while encouraging close coordination between gambling and financial regulators. The objective is to ensure that similar activities are subject to similar rules, providing regulatory consistency, legal certainty and effective consumer protection.

The record participation in the webinar demonstrated the value of bringing together experts and practitioners to exchange knowledge on issues of common concern. Although lotteries operate in different national contexts, many face similar challenges as new products emerge at the intersection of gambling, finance and technology.

As the regulatory debate continues to evolve in Europe and beyond, EL will remain engaged in these discussions, supporting its members through knowledge-sharing and ensuring that the lottery sector’s perspective continues to inform the debate.