“Prediction markets expose a regulatory loophole that needs a clear classification test”
European regulators face a classification problem: prediction market contracts could be gambling, MiFID II derivatives, or something else entirely, and different Member States treat them differently. Proposes a structured 'Prediction Test' modeled on Malta's Financial Instrument Test for crypto-assets, which would systematically categorize contracts through exclusion to determine which regulatory regime applies.
Some technical background helpful