While Americans wagered billions on their 2024 presidential election through prediction market platforms like Polymarket, with the market correctly forecasting Donald Trump’s victory before many pollsters, European regulators were moving in precisely the opposite direction. The divergence represents more than mere regulatory disagreement. It exposes a fundamental split over whether prediction markets constitute legitimate financial innovation or simply unlicensed gambling in a sophisticated disguise.

How Prediction Markets Operate

Prediction markets function as financial exchanges for real-world events. Participants purchase and sell contracts tied to specific outcomes, which settle at full value if correct or expire worthless if not. The critical distinction from traditional betting lies in the ability to trade these contracts before resolution. A trader buying at €0.48 who sees the price rise to €0.62 can exit early and lock in profit, creating behaviour far more reminiscent of derivatives trading than sports wagering.

This structural flexibility allows markets to be created around virtually any verifiable question.

For operators and users, it represents the cutting edge where finance, technology and probability converge. For European regulators, however, the same mechanics constitute a gambling product dressed up as financial innovation.

The French Position

France’s gambling regulator, the Autorité Nationale des Jeux, investigated Polymarket throughout 2024 before concluding its services likely constituted unauthorised gambling. The platform subsequently geoblocked French users. In a statement issued earlier this year, the ANJ declared prediction market platforms “not authorised in France and considered illegal gambling services.”

The regulator went further, warning that these platforms display “addictive characteristics like those found in online gambling, but amplified by the absence of protective mechanisms that exist in the legal gambling market.” The ANJ highlighted the lack of safeguards such as spending limits or identity verification, combined with round-the-clock operation, as particular concerns.

A Continent-Wide Blockade

France hardly stands alone. Germany, Belgium, Portugal, Switzerland, Romania, the Netherlands and Poland have all blocked Polymarket access, arguing the platform offers unlicensed gambling services. The Netherlands provides a particularly instructive case study in how existing law can be deployed to shut down prediction markets entirely.

According to Justin Franssen of Franssen Tolboom, the Dutch regulatory logic is straightforward. “First, prediction markets are considered games of chance. Second, as a product category they are, in principle, unlicensable,” he explains. Under Dutch law, licensed betting is effectively restricted to sports and horse racing. Markets on elections, weather events or other “special markets” fall outside permitted scope. The Remote Gambling Act’s explanatory memorandum explicitly rules out bets on events such as US presidential elections.

The Dutch KSA regulator reinforced this interpretation by issuing a cease-and-desist order against Polymarket, threatening an €840,000 fine.

Despite occasional political curiosity, including parliamentary questions triggered by one television personality’s claimed profits from the platform, Franssen notes little industry momentum exists for regulatory change. “To be honest, if it’s not on our radar as lawyers, it probably doesn’t really exist in a meaningful way yet.”

The Enforcement Challenge

Blocking platforms officially does not necessarily eliminate them in practice. Ismail Vali, founder and former CEO of Yield Sec and now President of RegTech firm Gaming Compliance International, argues that traffic and engagement data suggests prediction markets continue attracting European users despite official bans.

“Officially, yes, they might be blocked,” he observes. “But the traffic and engagement data across all of a platform’s access points tells a different story. We still see significant user traffic and engagement from jurisdictions where these platforms are supposedly blacklisted or blocked.”

The explanation is simple: online enforcement remains imperfect. Operators can deploy mirror domains, redirect links and utilise various technical workarounds.

The result is a regulatory framework that blocks legitimate operation while struggling to prevent determined access.

A Philosophical Divide

The contrast between American and European approaches ultimately reflects deeper questions about how societies view risk, speculation and the boundaries of legitimate financial activity. While the US debates whether prediction markets belong under derivatives or gambling regulation, much of Europe has simply decided it wants neither. Whether that position proves sustainable as prediction markets continue evolving, and as user demand persists despite official prohibition, remains an open question for European policymakers.

What the team thinks

Carl Mitchell: The Polymarket success shows these platforms can deliver real predictive value when properly structured, and that’s the irony here. While European regulators are slamming the door, American punters just demonstrated that crowd wisdom actually outperformed traditional polling by a mile.

Baz Hartley: I’m looking at this through the consumer lens, and what worries me is we’re watching Europe potentially miss out on transparent, blockchain based platforms in favour of keeping everything with traditional bookmakers who’ve had their own regulatory issues. The question should be about proper oversight and fair terms, not blanket prohibition.

Carl Mitchell: Exactly right, and from what I’ve seen covering the UK market, our regulators tend to be more pragmatic than this. If prediction markets can be structured with proper player protections and transparent mechanics, there’s no reason they can’t coexist with traditional betting markets.

Baz Hartley: The regulatory challenge is legitimate though, we need clear frameworks around market manipulation, liquidity requirements, and dispute resolution. But shutting down innovation entirely while American platforms demonstrate viability feels like Europe is choosing to be left behind rather than leading the conversation on proper standards.