The European Securities and Markets Authority (ESMA) has clarified that certain prediction market contracts fall under existing European Union financial regulations governing binary options, marking the regulator's first public intervention on the fast-growing sector.
In a recent statement, ESMA specified that event contracts with binary, yes-or-no outcomes and fixed payouts could be considered financial instruments under EU regulations. This move represents ESMA's initial step in addressing the regulatory implications of the expanding prediction market industry.
