ESMA questions Polymarket and Kalshi's EU market access
Regulation & Gov ·
The EU securities regulator says both prediction platforms lack authorization to sell event contracts in the bloc and has cast doubt on the geo-blocking and VPN restrictions they use to keep out EU users.
The European Securities and Markets Authority flagged Polymarket and Kalshi as major prediction platforms operating without the required EU authorization to market and sell event contracts, according to The Block. The regulator specifically questioned whether the two platforms' partial geographic and VPN-based restrictions are adequate to actually prevent EU residents from accessing their markets.
The scrutiny lands squarely within the EU's broader crypto enforcement architecture. Under the Markets in Crypto-Assets Regulation, any firm seeking access to European retail customers must comply with the bloc's licensing and conduct rules across all 27 member states at once, rather than satisfying a single national regulator. Event-contract platforms like Polymarket and Kalshi fall outside that framework as currently authorized, which is the basis for ESMA's finding that they lack the standing to market or sell such contracts to EU users.
The question of VPN adequacy is central to the case. If geo-blocking measures can be circumvented by VPN use, ESMA's position implies that restricting access by country of registration or IP address alone may not satisfy EU market-access requirements, regardless of a platform's formal intent to exclude EU customers.
The action is consistent with the EU's pattern of applying its supranational rulebook uniformly rather than reactively. The bloc has already extended similar scrutiny into adjacent areas, including oversight shifts from national regulators to ESMA and sanctions-related bans affecting crypto platforms tied to Russia, underscoring that enforcement in this space is not limited to formally licensed crypto-asset service providers.
What remains unresolved is whether ESMA's findings will translate into formal enforcement action, fines, or mandated changes to how Polymarket and Kalshi restrict EU access, and whether the two platforms will tighten their geo-blocking mechanisms or contest the regulator's characterization. Also unclear is whether other prediction-market operators face the same authorization gap and could be swept into similar findings as ESMA continues reviewing the sector.