The European Lotteries (EL) is calling for a coordinated regulatory approach to European prediction markets. The association says event contracts can fall between financial services and gambling rules. It wants regulation to focus on how a product works and the risks involved.

• Prediction markets allow users to take positions on future events, including elections, economic indicators and sports competitions. EL says these event contracts raise questions because they can overlap financial and gambling regulation. Their classification should depend on their characteristics and economic substance rather than how they are marketed.
• Under EU rules, some event contracts can qualify as financial instruments under MiFID II. Other products may instead fall under national gambling laws, while classification as a financial instrument does not automatically exempt a product from gambling legislation. As gambling regulation remains a national responsibility, European prediction markets must also be assessed country by country.
• EL also wants regulators to treat similar activities consistently, regardless of the technology used. This includes products based on blockchain, smart contracts or tokenisation. EL Secretary General Piet Van Baeveghem said: “Activities that present similar risks should be subject to similar safeguards.”

Please find more news here.