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On July 3, 2026, the European Securities and Markets Authority (ESMA) issued a statement reminding firms of their obligation to assess whether newly offered products fall within the scope of existing product intervention measures on binary options. The statement responds to the growing popularity of prediction markets—also known as event contracts—and increasing retail participation globally. Event contracts are products with binary financial outcomes (a fixed payout or no payout) that depend on a yes-or-no answer to a question about a future event. Whether event contracts qualify as financial instruments depends on the specific event question posed. ESMA clarified that event contracts may also qualify as bets under national gambling legislation. Where event contracts are classified as financial instruments, they constitute derivatives and fall within the scope of existing national product intervention measures on binary options adopted by national competent authorities. These measures prohibit the marketing, distribution, or sale of such products to retail clients. ESMA emphasised that the distribution of event contracts qualifying as financial instruments within the European Union requires authorisation as an investment firm, even where distribution is limited to non-retail clients. The statement underscores firms' responsibility to conduct thorough product assessments to determine whether newly developed or offered products meet the criteria for binary options classification and are therefore subject to existing restrictions. This reminder reflects ESMA's ongoing efforts to ensure investor protection amid evolving market developments and the emergence of new product structures that may circumvent existing regulatory safeguards. Firms should review their product offerings and distribution practices to ensure compliance with applicable binary options product intervention measures.