The European Lotteries (EL) has urged regulators to judge prediction markets by their legal structure, economic substance and consumer risks rather than the terminology or technology used to promote them.
The association issued its position as event-contract platforms attract increasing attention in Europe. These products allow users to take positions on whether future events will occur, covering areas including politics, economic indicators and sport.
EL said the rapid development of the sector creates potential gaps between financial-services and gambling regulation. Its position is that products presenting comparable risks should face comparable safeguards, regardless of whether operators describe them as prediction markets, event contracts or another form of financial product.
The classification is particularly important in the European Union. The European Securities and Markets Authority said in July that some event contracts can qualify as financial instruments depending on their underlying question. When they do, they are treated as derivatives and can fall under national restrictions covering binary options. Event contracts may also qualify as betting products under individual countries’ gambling laws.
EL therefore supports a country-by-country assessment before attempts are made to establish a broader European approach. Gambling regulation remains largely a national responsibility, meaning the legal status of prediction products can differ substantially between jurisdictions.
The organisation outlined four principles for policymakers: classification should depend on a product’s characteristics and risks; national governments should retain control over the organisation of gambling; technology should not provide an exemption from existing regulatory requirements; and financial and gambling authorities should cooperate closely on enforcement and oversight.
Gibraltar has already taken a separate route. Its Prediction Market Regulations 2026 came into force in July under the jurisdiction’s new gambling legislation, creating a specific regulatory framework for the sector. Gibraltar also introduced dedicated fees and duties rules for prediction markets in August.
EL Secretary General Piet Van Baeveghem said regulation needs to develop alongside the market, with safeguards determined by what a product actually does rather than how it is branded.
The association’s intervention comes as the distinction between gambling and financial-market regulation becomes an increasingly important issue for prediction platforms seeking to expand across Europe.