PREDICTION MARKETS
Will prediction markets come to Europe? MUCH HAS BEEN MADE OF THE AMBITIONS OF PREDICTION MARKET PLATFORMS TO SPREAD ACROSS THE POND. PHIL SAVAGE ASKS: WHAT BARRIERS DO THEY FACE AND ARE THEY ALREADY THERE?
P rediction markets and associated court actions continue to dominate the conversation in the U.S. and elsewhere. With a legal position in what may kindly be described as a state of flux, interest shows no sign of waning. Many commentators have predicted that it is only a matter of time before prediction markets make their entry onto European markets and further afield. In this article we review how likely that is and what barriers operators in the space would have to overcome and whether, indeed, they are already there. Defining terms Before considering whether prediction markets are legal in various European jurisdictions and in the EU as a whole, we first have to define the product and consider where it would sit in markets outside the U.S. Prediction markets in the U.S. are exchange platforms where individuals can acquire a financial interest in the outcome of future events. It has long been possible for those who stand
to gain or suffer loss to hedge against the future price of a commodity or the likelihood of a weather event. In the case of commodities, trades can be made without the physical assets being owned. 1 As financial instruments, it makes perfect sense for these trades to be regulated by a financial regulator, the Commodity Futures Trading Commission (CFTC), which defines them as Event Contracts. One could be forgiven for thinking that prediction markets being offered on political and sporting events started with the 2024 presidential election and hit the mainstream with the NFL Super Bowl LIX. In fact, data from individuals betting on the outcome of events predated opinion polls by many decades. Betting data accurately predicted the result in the majority of U.S. presidential elections between the late 1880s up to 1940. 2 Indeed, it was only the rise of strict anti-gambling laws in the 1930s that allowed scientific polling to emerge. 3 There are still many who consider the views of individuals with some "skin in the game" to be a better predictor of outcomes than opinion polls. 4
1 https://www.aeaweb.org/articles 2 https://www.biancoresearch.com/betting-on-elections/ 3 https://www.pbs.org/fmc/segments/progseg7.htm 4 https://www.researchgate.net/publication/393685505_Are_Betting_Markets_Better_than_Polling_in_Predicting_Political_Elections
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IMGL MAGAZINE | JUNE 2026
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