# Breaking News: ESMA Warns on Event Contracts; Prediction Markets Surge
The European Securities and Markets Authority ruled on July 3 that event contracts, regardless of branding, may still fall under the EU’s binary options ban for retail clients if structured around yes-or-no outcomes with fixed payouts. The regulator stressed that classification depends on whether underlying events fall under MiFID II scope, issuing the warning to firms and national authorities as prediction markets explode globally.
Prediction markets surged past $50 billion in monthly trading volume for June, up 75% from May, according to Artemis data. Kalshi dominated with $33 billion, Polymarket handled $14 billion across platforms, and Robinhood-backed Rothera contributed $2 billion. Meanwhile, Plus500 expanded its US offering by adding CFTC-regulated sports event contracts through Kalshi, complementing its February launch of economic and geopolitical prediction markets.
Separately, Australia’s ASIC warned that crypto perpetual futures are growing faster than regulation allows, with offshore platforms offering CFD-like leverage outside regulatory reach.
**
FXnCO Insight
** EU-based brokers offering event contracts should immediately review product structures for MiFID II compliance to avoid binary options classification and potential enforcement action.
Source: Finance Magnates