Introduction
Prediction markets — trading on the outcome of events, from elections to rate decisions — are among the fastest growing crypto categories worldwide. In the EU, however, their legal status is the least settled of all product types.
What are prediction markets?
You buy contracts that pay out if an event occurs ("Yes/No on outcome X"). The contract price reflects the estimated probability. Traders use them for speculation and as an information source — prices often out-predict polls.
The EU legal problem
Unlike spot crypto (MiCA) or derivatives (MiFID II), no EU framework was written for event contracts. Status depends on classification, which differs per member state.
Three possible regimes
- MiFID II (financial instrument): contracts on financial outcomes (rates, index levels) resemble derivatives.
- Gambling law: contracts on non-financial events (sport, entertainment) may qualify as bets — requiring a national gambling licence.
- Grey zone: many contracts fall in between; providers often geo-block EU countries or restrict the offering.
Who offers what?
A few regulated exchanges have announced or beta-launched prediction markets; the large standalone prediction platforms serve the EU inconsistently or not at all.
What to check
- May the provider serve you? Licences, and whether your country is geo-blocked.
- Settlement source: who decides the outcome (oracle) and what happens with disputed events?
- Tax: treatment is unsettled — consult an adviser.
Frequently asked questions
Are prediction markets legal in the Netherlands?
It depends on the contract's classification and the provider's licence. No general ban, no explicit framework either.
Is this gambling or investing?
Legally: depends on the underlying event. Practically: treat it as high-risk speculation.