ESMA clarifies EU rules for prediction market event contracts
ESMA said certain binary, fixed-payout event contracts may qualify as financial instruments under MiFID II, depending on the underlying event. Where they do, EU measures prohibit marketing, distributing or selling them to retail clients, and firms distributing them must have investment firm authorisation even when serving professional or institutional investors.
Operators may need to assess whether event contracts fall within EU financial rules and retail distribution restrictions.