Esma Warns Prediction Markets Are Rife With Insider Trading as EU Keeps Most Platforms Banned
Updated
Updated · Financial Times · Sep 10
Esma Warns Prediction Markets Are Rife With Insider Trading as EU Keeps Most Platforms Banned
3 articles · Updated · Financial Times · Sep 10
Summary
Esma said fast-growing prediction markets such as Polymarket and Kalshi pose investor-protection and market-integrity risks, warning retail users face losses, addictive behavior and exploitation by more sophisticated traders.
The EU watchdog said insider trading and manipulation risks reach “new levels” on platforms with limited identity checks, citing a growing number of incidents and an April case involving a US soldier accused of profiting from Polymarket wagers.
Most of Europe still bars unauthorised prediction sites, though Esma said some users may be accessing them via VPNs while Malta explores a regulatory framework and the UK reviews retail-access rules.
That stance diverges from the US, where authorities have allowed new prediction-style products even as the CFTC investigates Polymarket and Kalshi pursues overseas expansion after surpassing Polymarket in trading volume.