The European Commission has put a price tag on its approach to crypto and online gambling — and it points in the opposite direction from Washington.
In a document shared with national governments and the European Parliament on May 28, the Commission estimated that a package of new EU-wide taxes on online gambling, cryptocurrency transactions, and digital companies could generate up to €13.3 billion ($15.5 billion) over the bloc’s next seven-year budget cycle from 2028 to 2034.
The crypto-specific numbers are significant. The Commission projected that a 0.1% tax on the value of crypto transactions could bring in €3 to €4 billion ($3.5 to $4.7 billion) per year, while a separate tax on crypto capital gains could generate an additional €1 to €2.4 billion ($1.2 to $2.8 billion) annually. A 3% levy on the net turnover of online gambling operators would add approximately €1.9 billion ($2.2 billion) per year.
The proposals were put forward by the European Parliament to break a months-long deadlock over the Commission’s original budget revenue package. EU taxes — known as “own resources” — require unanimous approval from all 27 member states, and Cyprus, which holds the current Council presidency, is expected to present revised figures around June 10.
Two Regulatory Philosophies, One Week Apart
The timing makes the transatlantic divergence impossible to ignore.
One day after the Commission circulated its tax estimates, the U.S. Commodity Futures Trading Commission executed the most aggressive crypto derivatives onshoring push in its history. In a single day, the CFTC approved KalshiEX’s BTCPERP contract as the first true Bitcoin perpetual futures product on a U.S.-regulated exchange, cleared Coinbase Financial Markets to route U.S. customers to Deribit perpetual futures as foreign futures, released a policy statement establishing a case-by-case review framework for future perpetual contracts, and issued a staff advisory on 24/7 trading and clearing.
CFTC Chairman Mike Selig framed the actions as delivering on his commitment to use the agency’s tools to bring crypto perpetuals onshore into the U.S. regulatory framework.
The EU is moving in the opposite direction. Rather than creating regulated pathways for crypto derivatives and prediction markets, Brussels is exploring how to tax them—and in several member states, how to block them entirely.
Europe’s Prediction Market Crackdown Is Accelerating
The Commission’s tax proposals arrive in the middle of a continent-wide crackdown on crypto prediction markets.
Last week, Spain suspended access to both Polymarket and Kalshi, citing unlicensed gambling operations. Spain joins a growing list of countries that have blocked or restricted prediction market platforms, including Brazil, Singapore, and multiple other EU nations, including France and Portugal.
The pattern is consistent: European regulators classify prediction markets as gambling, not as financial products. That classification determines which rules apply, which licenses are required, and critically, how the revenue gets taxed.
A formal EU-wide gambling tax would harden that classification at the bloc level. If prediction markets are taxed as gambling under the EU’s own-resources framework, it becomes significantly more difficult for platforms like Polymarket or Kalshi to later argue in European courts that they are financial instruments under MiCA or any other regulatory framework.
The Crypto Transaction Tax Adds Another Layer
The gambling levy is only part of the picture. The Commission’s proposed 0.1% crypto transaction tax would apply broadly across digital asset trading — not just to prediction markets or perpetual futures.
The Commission itself acknowledged the uncertainty, warning that potential revenue from crypto taxes is difficult to calculate due to a lack of data. But the figures it did produce — €3 to €4 billion ($3.5 to $4.7 billion) per year from the transaction tax alone — suggest the EU sees crypto trading volume as a significant untapped revenue source.
For the crypto industry, the concern is that a transaction-level tax would make EU-based trading less competitive compared to jurisdictions that don’t impose similar levies. Combined with the gambling classification for prediction markets and the ongoing platform bans, the package creates a regulatory environment that could push crypto derivatives liquidity further offshore — the opposite of what the U.S. is trying to achieve.
Where Liquidity Goes Next
The divergence matters because liquidity follows regulatory clarity. Crypto exchanges processed an estimated $86 trillion in perpetual futures volume last year, according to CoinGecko data. Most of that activity occurred on offshore platforms outside both U.S. and EU regulatory reach.
The U.S. strategy under CFTC Chairman Selig is to capture a share of that liquidity by bringing perps onshore through regulated exchanges. The EU’s emerging strategy appears to be the inverse: treat the products as gambling, tax the operators, and restrict platform access.
For platforms like Kalshi and Polymarket, which are already competing to dominate the U.S. perps market, and for exchanges like Coinbase, which just gained CFTC clearance for institutional crypto derivatives access, the EU’s direction may simply confirm that Europe is not the target market.
The result could be a two-track global derivatives landscape: one where U.S.-regulated platforms absorb institutional perps liquidity under CFTC oversight, and another where Europe taxes, restricts, and effectively cedes the market — while collecting billions in revenue from whatever activity remains.
