# Why Europe and the UK block event contracts

Europe tests an event contract twice, as a financial instrument and under gaming law, and retail access fails both. What ESMA, the FCA, UKGC and ANJ say.

*https://predictionmarkets.tools/guides/why-europe-blocks-event-contracts · background to Prediction Market Venues*

**Answer:** Mostly because of rules from 2018 and 2019, not new ones. ESMA says event contracts that are financial instruments fall under the binary-option measures every EU state adopted, which bar selling them to retail clients; the UK has banned retail binary options since 2019. Where a contract is not a financial instrument, gaming law applies instead: Great Britain's gaming regulator says such products would appear to need its licence, and France's ANJ ordered Polymarket blocked in July 2026.

A European reader who opens a US venue's page and finds the account will not open is meeting two
regimes at once, run by different authorities and reaching the same result by different
reasoning. One asks whether the contract is a financial instrument. The other asks whether it is
a product its own law requires a licence to offer. An event contract can be caught by either,
and the venues that serve the United States have been caught by both.

## How it works

### The first test: is it a financial instrument?

ESMA's [public statement of 3 July 2026](https://www.esma.europa.eu/sites/default/files/2026-07/ESMA35-243228190-8148_Public_Statement_on_the_application_of_the_national_product_intervention_measures_on_binary_options_to_event_contracts.pdf)
starts from a definition: event contracts are "agreements whose financial outcome is binary (a
fixed payout or no payout at all) and depends on a yes-or-no answer to a question about a future
event". It then splits them.

"Not all event contracts are financial instruments. Only event contracts with an event question
related to an underlying mentioned in Section C(4) to (10) of Annex I of MiFID II classify as
financial instruments." Which questions those are is set by that annex, not by the category
labels a venue puts on its markets.

Those that do qualify "are derivatives", and that brings in a rule from 2018. ESMA's Decision
(EU) 2018/795 of 22 May 2018 temporarily prohibited the marketing, distribution or sale of binary
options to retail clients across the Union; it was renewed by quarterly decisions until 1 July
2019, and in the meantime every national competent authority adopted permanent measures
"mostly mirroring" it. ESMA says those national measures "are currently in place in all Member
States of the EU". So, in the statement's words: "the marketing, distribution or sale to retail
clients of event contracts that meet the definition of financial instruments is prohibited."

The statement closes the obvious exits:

- **The name does not matter.** "The commercial name provided by firms (e.g. 'event contracts') is
  irrelevant for the categorisation under MiFID II."
- **A yield does not change the shape.** Where an investor receives a coupon or reward
  representing interest earned on the funds paid, "the existence of such 'coupon' or 'reward' does not change the binary nature
  of the event contract itself."
- **Selling only to professionals still needs a licence.** Distributing such contracts in the EU
  "requires this authorisation", investment-firm authorisation under MiFID II, "irrespective of
  the category of clients".
- **Routing around it is itself prohibited.** A footnote notes that "participating in
  circumvention activities to the product intervention measures is prohibited".

The binary option the 2018 decision targets is defined in the statement's footnote: a derivative
settled, or settleable, in cash, paying only at close-out or expiry, and paying either a fixed
amount or zero depending on whether the underlying meets a condition. Certain binary options were
excluded from the decision's scope. ESMA's
[news item](https://www.esma.europa.eu/press-news/esma-news/esma-reminds-firms-existing-rules-and-obligations-under-binary-option-measures)
of the same day frames the whole statement as a reminder to firms "of their obligation to assess
whether newly offered products fall within the scope of existing product intervention measures".
Nothing new was prohibited on 3 July 2026.

### The UK: banned since 2019

The UK reached the same rule by its own route. The FCA's
[PS19/11](https://www.fca.org.uk/publications/policy-statements/ps19-11-product-intervention-measures-retail-binary-options),
published on 29 March 2019, set out rules "to permanently prohibit the sale, marketing and
distribution of binary options to retail consumers by firms that carry out activity in, or from,
the UK", in force from 2 April 2019. It went further than ESMA's measure, "capturing all binary
options, including 'securitised binary options' (as defined by ESMA), which are exempt from their
ban".

The FCA has since looked at event contracts by name, without changing the rule. Its
[Discussion Paper DP25/3](https://www.fca.org.uk/publication/discussion/dp25-3.pdf) of December
2025, open for comment until 6 March 2026, lists among speculative products "horizon contracts",
which "allow consumers to speculate on future outcomes, such as macroeconomic indicators,
politics, commodity prices, or event-based forecasts. Depending on how it is structured, this type
of investment may meet the definition of a binary option and be banned under our legal and
regulatory framework." The paper asks whether to replace its product-by-product approach with one
"more risk and return centred and product agnostic". A discussion paper asks questions; it does
not change the rules.

### The second test: is it a product gaming law licenses?

ESMA's own footnote opens the second door: event contracts "may also classify" under national
gaming legislation, and token-form contracts that are not financial instruments may be
crypto-assets under MiCA.

**Great Britain.** The statutory gaming regulator, the UKGC, set out its view in a
[blog post of 4 February 2026](https://www.gamblingcommission.gov.uk/blog/post/prediction-markets-heres-what-you-need-to-know)
by its Director of Strategy. It describes a prediction market as "a platform which enables
participants to trade event-based contracts on markets including financial, sports, and political
events", and says that, subject to the business model, current products would appear to fall
within one of its existing licence categories, the one held by the intermediary exchanges that
have operated in the UK since 2000. It does not believe an operator launching in Great Britain
could class its products as outside its regime, and it adds: "Current prediction market operators
who are not licensed in Great Britain should take steps to ensure they are not targeting or
transacting with consumers in Great Britain. There are criminal offences associated with
operating without an appropriate licence here." Firms offering financial services products are,
it notes, regulated by the FCA instead. It declines a view on the US: "It is not for us to comment
on ongoing legal debates on the status of prediction markets in the United States or elsewhere."

So in Great Britain the two tests meet in the middle. A contract that is a binary option is under
the FCA's 2019 ban; one that is not is, in the gaming regulator's view, a product its licence
covers.

**France.** The ANJ, France's gaming authority, said on
[24 February 2026](https://anj.fr/plateformes-de-marches-de-prediction-des-sites-illegaux-en-france-qui-peuvent-presenter-des-risques)
that prediction-market sites "ne sont pas autorisés" in France and are treated as unauthorised
offers under its law, that the main operators had installed geoblocking at its request, and that
Kalshi had done the same. On
[17 July 2026](https://anj.fr/promotion-dune-offre-de-jeux-dargent-illegale-blocage-du-site-polymarket)
it announced that its president had, on 16 July, ordered French internet providers to block
access to Polymarket. The notice gives its reasons: the earlier geoblock on financial transactions
"donnant en pratique lieu à des contournements" (was being circumvented in practice); the site
drew 578,751 visits and 205,057 unique visitors from France in June 2026; and its homepage, showing
live prices, was "un vecteur majeur de diffusion et de promotion" of the offer. The ANJ says it
blocked 1,290 URLs in 2025 under the same power.

**Elsewhere.** The ANJ's two notices name other European countries that have restricted or
blocked prediction markets, among them Germany, Belgium, Switzerland, the Netherlands, Poland,
Italy, Portugal and Spain. That list is the ANJ's summary; this page has not read those
authorities' own decisions, and their reasoning may sit under either test.

## What the two tests share

They are asked by different regulators, under different laws, and answered differently for
different contracts. They agree on the result for a retail customer: the contract may be offered
only by a firm authorised for it in that country. The UKGC's post and the ANJ's notices are both
addressed to operators that are not.

That is why a block in Europe is usually not a statement about the contract's quality or about
US law, and why a venue's own country list changes when a regulator acts rather than when the
venue does. [Why a venue is unavailable where you are](https://predictionmarkets.tools/guides/why-a-venue-is-unavailable-where-you-are)
covers how venues implement the block: a location check, a statement you sign, a rail that will
not carry your money, or [close-only](https://predictionmarkets.tools/glossary/close-only) status.

## What you can do about it

**Ask the venue which authorisation it serves your country under.** A firm offering event
contracts to a retail client in the EU needs either to fall outside the binary-option measures or
to hold whatever the national gaming law requires. A venue that cannot name the licence for your
country is telling you something.

**Do not treat professional status as a key.** ESMA's statement says distribution to non-retail
clients still requires MiFID authorisation. Opting up to professional does not make an
unauthorised venue an authorised one.

**Do not route around a block.** ESMA's statement notes that participating in circumvention of
the measures is prohibited; the UK regulator says operating without a licence is an offence; the ANJ found
Polymarket's earlier geoblock was being circumvented and responded with a block at the network
level. What a venue does to an account it finds circumventing is in its own terms, and the venue
guide linked above quotes them.

**Separate reading from trading.** Following prices and using public market data is not trading,
but in France the ANJ treats the public display of an unauthorised site's odds for the purpose of
promotion as an offence of its own. [What you may do with a venue's prices](https://predictionmarkets.tools/guides/what-you-may-do-with-a-venues-prices)
covers the rest of that question.

**If what you want is to be right rather than to be paid,** the scored forecasting platforms in
this catalogue, [Metaculus](https://predictionmarkets.tools/tools/metaculus) and [Good Judgment Open](https://predictionmarkets.tools/tools/good-judgment-open),
settle in points rather than money, which is a different activity from the one both tests
describe; their own terms still apply.

**Watch the documents, not the headlines.** The pieces that can move: the FCA's response to
DP25/3, which would come as a consultation; any ESMA follow-up to the July 2026 statement; national
gaming regulators' orders, each of which names its date.

## Tools this bears on

- [Polymarket](https://predictionmarkets.tools/tools/polymarket.md) — Self-custody event contracts on an on-chain order book, resolved by the UMA oracle.
- [Kalshi](https://predictionmarkets.tools/tools/kalshi.md) — A CFTC-designated exchange for event contracts, settled in dollars against named sources.
- [Metaculus](https://predictionmarkets.tools/tools/metaculus.md) — Proper scoring and public track records on questions nobody can take a position in.
- [Good Judgment Open](https://predictionmarkets.tools/tools/good-judgment-open.md) — Brier scores against the crowd, and the recruiting ground for Superforecasters.

## FAQ

### Did ESMA ban event contracts in July 2026?

No. Its public statement of 3 July 2026 is a reminder that the national product intervention measures on binary options, which replaced ESMA's temporary 2018 prohibition and are in place in every EU member state, apply to event contracts that are financial instruments. Those measures prohibit marketing, distributing or selling such contracts to retail clients.

### Is every event contract a financial instrument in the EU?

No. ESMA says only event contracts whose question relates to an underlying listed in Section C(4) to (10) of Annex I of MiFID II are financial instruments. Others may fall under national gaming law, or, if they take token form and are not financial instruments, under MiCA as crypto-assets.

### Can a professional client in the EU trade event contracts?

The retail ban does not reach professional clients, but ESMA says distributing event contracts that are financial instruments in the EU requires authorisation as an investment firm under MiFID II, even when offered only to non-retail clients. A venue without that authorisation is not a lawful route for a professional either.

### What does the UK's gaming regulator say about prediction markets?

In a blog post of 4 February 2026 it said current prediction-market products would appear to fall within one of its existing licence categories, that it does not believe an operator launching in Great Britain could class its products as outside its regime, and that unlicensed operators should not target or transact with consumers in Great Britain.

## Sources

1. [Public Statement on the application of the national product intervention measures on binary options to event contracts (ESMA35-243228190-8148)](https://www.esma.europa.eu/sites/default/files/2026-07/ESMA35-243228190-8148_Public_Statement_on_the_application_of_the_national_product_intervention_measures_on_binary_options_to_event_contracts.pdf) — European Securities and Markets Authority, 2026-07-03
2. [ESMA reminds firms of existing rules and obligations under binary option measures amid growing popularity of prediction markets globally](https://www.esma.europa.eu/press-news/esma-news/esma-reminds-firms-existing-rules-and-obligations-under-binary-option-measures) — European Securities and Markets Authority, 2026-07-03
3. [PS19/11: Product intervention measures for retail binary options](https://www.fca.org.uk/publications/policy-statements/ps19-11-product-intervention-measures-retail-binary-options) — Financial Conduct Authority, 2019-03-29. The permanent ban this page announced is the framework the FCA's own Discussion Paper DP25/3 of December 2025 still refers to.
4. [DP25/3: Expanding Consumer Access to Investments (Discussion Paper, December 2025), paragraphs 2.23 to 2.25](https://www.fca.org.uk/publication/discussion/dp25-3.pdf) — Financial Conduct Authority, read 2026-10-23
5. [Prediction markets - here's what you need to know (blog post by Brad Enright, Director of Strategy)](https://www.gamblingcommission.gov.uk/blog/post/prediction-markets-heres-what-you-need-to-know) — Great Britain's statutory gaming regulator (UKGC), 2026-02-04
6. [Plateformes de marchés de prédiction : des sites illégaux en France qui peuvent présenter des risques pour les utilisateurs](https://anj.fr/plateformes-de-marches-de-prediction-des-sites-illegaux-en-france-qui-peuvent-presenter-des-risques) — Autorité nationale des jeux (ANJ), 2026-02-24
7. [Promotion d'une offre de jeux d'argent illégale : blocage du site Polymarket](https://anj.fr/promotion-dune-offre-de-jeux-dargent-illegale-blocage-du-site-polymarket) — Autorité nationale des jeux (ANJ), 2026-07-17

*Last updated 2026-10-23. A reference page, corrected in place — not a dated post.*