Kalshi sees no near-term EU setup despite ESMA talks

Kalshi is in discussions with European regulators, including the European Securities and Markets Authority, but does not expect to establish a full EU presence in the near term because of the region’s fragmented rulebook.

Udesh Jha, Kalshi’s chief risk officer, set out that position at the Global Prediction Markets Forum, held on the final day of SBC Summit 2026 in Lisbon. “You can’t get the regulation clarified in one go, it’s going to be a process,” he said.

The comments point to regulatory engagement rather than an imminent European launch. Jha said Kalshi would like to enter the market, but identified the lack of a unified framework as the constraint. Europe has no single prediction-markets authority comparable to the US Commodity Futures Trading Commission; oversight is divided between financial supervisors and national gambling regulators.

ESMA’s own July statement shows why classification is central to the issue. It said event contracts have a binary financial outcome, paying either a fixed sum or nothing according to the answer to a yes-or-no question about a future event. Their commercial label does not determine their legal status.

Only contracts linked to specified underlying assets under MiFID II qualify as financial instruments, ESMA said. Where they do, they are derivatives subject to national binary-options product-intervention measures. Those measures, now in place across every EU member state, prohibit marketing, distribution and sale of qualifying contracts to retail clients; distribution to non-retail clients requires MiFID II authorisation.

Other event contracts may instead be treated as bets under national gambling laws, or as crypto-assets under MiCA if they take token form and are not financial instruments. In September, ESMA also warned that Kalshi and Polymarket lacked the authorisation generally required to serve EU users, and questioned why their restricted-jurisdiction lists did not cover all EU member states.

The Lisbon forum highlighted how those classifications remain contested. Gibraltar and Malta regulators differed over whether prediction-market users should be viewed as traders or bettors. Gibraltar’s gambling commissioner Andrew Lyman argued that consumer demand would keep the sector growing and urged regulation rather than bans or blocks, while Malta Gaming Authority chief executive Charles Mizzi said Malta’s existing framework accommodates prediction markets and that operators were applying for licences.

Gibraltar introduced a dedicated prediction-markets framework on July 13. At the same forum, Matchbook chief growth officer Alex Gowar offered a more sceptical commercial assessment, saying European customers in regulated markets can choose sportsbooks and that operators would need to educate consumers because he did not see overwhelming demand for prediction markets.