Prediction markets may have become a booming industry in the United States, but the European Union (EU) and the UK remain reluctant to embrace them because of the inherent risks of supervising them and the potential harm they could cause consumers.
In September, the European Securities and Markets Authority (ESMA), the EU’s main financial market regulator, said in its twice-yearly risk report that so-called “prediction markets”—which provide a way of betting on a huge range of future events, such as sports games, election results, and the price of oil—raised “a range of investor protection and market integrity concerns” and required “continued monitoring.”
