Prediction markets continue to cause furore across Europe, with The European Lotteries (EL) issuing a call for caution when approaching the subject from a regulatory perspective.
The organisation, which is an umbrella body for state-owned lotteries in Europe, published a word of advice to both policymakers and business leaders alike – treat prediction markets and other emerging products for what they truly are, avoiding marketing language.
Prediction markets themselves are viewed as two different things on both sides of the Atlantic. In the US, where they originate from, the general consensus is that they are financial instruments – offering event contracts on the outcome of various events.
In Europe, however, most regulators see prediction offers as a gambling product – with some exceptions like Gibraltar, which launched a separate framework to regulate prediction markets earlier this year.
This division was further put on display at today’s Global Prediction Markets Forum during the last day of SBC Summit Lisbon, with figureheads from the likes of Kalshi, WagerWire, and Gibraltar’s and Malta’s governments in attendance.
‘Focus on the technicalities, not marketing’
Back to EL’s statement, the organisation urged all relevant stakeholders to treat prediction markets for their legal characteristics and the associated risks they carry, as opposed to the marketing language that accompanies them or the technology such offers have integrated.
To achieve optimal understanding of prediction markets and effectively integrate them into the European markets, EL believes that a country-by-country approach is required first, given how different regulatory frameworks are across each Member State.
Only when the details are ironed out on a national level can an international discussion lead to tangible Europe-wide strategy, EL added.
Piet Van Baeveghem, EL Secretary General, concluded: “Prediction markets are developing rapidly, and regulation should keep pace. EL’s position is simple: activities that present similar risks should be subject to similar safeguards. The focus should be on the nature of the product and activity, rather than the label or underlying technology attached to it.”