EU Regulator Targets Risks in Prediction Markets

The European Securities and Markets Authority is turning its attention to prediction markets like Polymarket and Kalshi. Regulators argue that these platforms are prone to inside trading. Because these sites often rely on participants to verify outcomes, officials worry that people with private information can influence results for personal gain.

Beyond concerns about fairness, the regulator is questioning the inconsistency of geographic restrictions. While some platforms block users from specific European countries, others remain open or fail to enforce their rules effectively. The agency noted that users frequently bypass these location blocks by using VPN services, making current geographic safeguards largely ineffective.

This increased scrutiny suggests that prediction platforms may face tougher compliance rules in the near future. Traders should watch for potential policy shifts or increased pressure from European authorities to mandate stricter identity verification. For now, the regulatory focus remains on whether these platforms can actually prevent the illegal use of insider information.