WEBVTT

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Prediction markets
are exploding in the US.

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How can firms access
similar markets

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in the UK and EU?

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The explosion of prediction
markets in

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the US has generated

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major interest from companies
looking to launch

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similar products
in the UK and the EU.

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That interest comes from
both major US platforms

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looking to expand

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across the Atlantic,
but also from homegrown firms

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looking to structure
their own product offerings.

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In the UK and EU, contracts
tied to financial events,

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like interest rate moves,
stock prices,

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or crypto prices, fall under
the financial services regime,

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whereas contracts

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tied to sports
and political events

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default to the gaming regime.

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This differentiation
really matters

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because the EU
Financial Services Framework

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offers passporting rights
across the market,

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enabling firms to access
roughly 400 million customers.

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Whereas the gaming regime
is fragmented and member-state

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specific, making cross-EU
distribution very challenging.

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In addition,

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product intervention measures
in the UK and the EU

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restrict offering binary
options to retail clients,

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and many
prediction contracts

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fall within
that classification.

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As a result, companies
are either

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limiting distribution
to professional investors

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or seeking to

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structure products compatible

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with their requirements,
an approach

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that some EU regulators
have already accepted.

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Some companies are pursuing
cross-border or

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reverse solicitation models,
which raise

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a number of challenges
and require expert counsel

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to help navigate
the right options.

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Others are seeking UK
or EU licenses,

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focusing on financial services

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to take advantage
of the harmonized framework.

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Across both routes,

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the novelty of these products
demands sustained

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regulatory engagement,
and experienced

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counsel can help lead
these conversations.

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Latham advises the major US
and European platforms

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structuring
prediction contracts,

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helping them navigate
existing and emerging rules.

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I’m Gabriel Lakeman,

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Global Co-Chair of Latham’s

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Digital Assets
and Web3 practice.

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I’ve spent more than a decade
advising clients

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at the intersection
of financial services,

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technology, and regulation.