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ESMA says some prediction contracts may face retail binary-options restrictions

Regulation

The European Securities and Markets Authority said some fixed-payout, yes-or-no event contracts may fall under EU restrictions on marketing and selling binary options to retail customers. It said contracts linked to assets covered by MiFID II must be treated as financial derivatives, while some other event contracts may fall under gambling rules or the forthcoming MiCA framework.

Platforms offering event contracts may need to assess whether financial-instrument restrictions apply to their products.

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Regulation

Kalshi records $25.3bn in parlay trading during midterm period

Kalshi recorded more than $1.1 billion in election trading during the 10 days around the US midterms, while parlays generated $25.3 billion over the same period, according to analysis of prediction-market data. Election trading accounted for 3% of platform volume; volume measures contracts exchanged, not revenue retained by the platform.

Kalshi processed more than $1.1 billion on elections during the 10 days surrounding the midterms, only 3% of the platform's volume. Over the same period, Kalshi processed $25.3 billion in parlays and also $6.1 billion in non-parlay sports contracts.

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