European Lotteries urges regulators to look past prediction market hype

The European Lotteries has told policymakers and industry leaders not to take prediction markets at face value, calling for regulatory decisions to be based on the legal substance of the products rather than how they are marketed.

The organisation, which represents state-owned lotteries across the continent, issued the advice as prediction markets continue to generate debate among European regulators, according to SBC News.

The products sit awkwardly across the Atlantic divide. In the United States, where they originated, prediction markets are generally treated as financial instruments offering event contracts tied to the outcome of real-world events.

Most European regulators instead treat them as gambling products. Gibraltar is one exception, having introduced a standalone regulatory framework for prediction markets earlier this year.

That split was visible at the Global Prediction Markets Forum, held on the final day of SBC Summit Lisbon, where representatives from Kalshi, WagerWire, and the governments of Gibraltar and Malta took part.

European Lotteries argues that stakeholders should assess prediction markets by their legal characteristics and the risks they carry, rather than by the marketing language or technological packaging attached to them.

The body believes a country-by-country approach is the necessary first step, reflecting how widely regulatory frameworks already differ between EU Member States. Only once that national-level detail is settled, it says, can a coherent Europe-wide strategy follow.

EL Secretary General Piet Van Baeveghem summarised the position directly: "Prediction markets are developing rapidly, and regulation should keep pace. EL's position is simple: activities that present similar risks should be subject to similar safeguards. The focus should be on the nature of the product and activity, rather than the label or underlying technology attached to it."