Spain blocks Polymarket and Kalshi as 3 nations join crackdown

Spain's gambling regulator ordered local internet service providers to block Polymarket and Kalshi on Tuesday, making the country the third jurisdiction in as many weeks to restrict the prediction market platforms over unlicensed gambling concerns.

The Directorate General for the Regulation of Gambling (DGOJ), operating under Spain's Ministry of Social Rights, Consumption, and Agenda 2030, said it opened legal proceedings against both companies for allegedly violating Spanish gambling laws by operating without a required administrative license. The precautionary block will remain in place for three to four months while the investigation runs, the regulator said.

"Prediction markets are deemed to constitute games of chance when bets are placed on uncertain future outcomes," the DGOJ said in a Tuesday notice. "Consequently, operating such markets within Spanish territory requires obtaining a specific administrative license."

A Polymarket spokesperson said the platform was "committed to engaging constructively with relevant authorities in all jurisdictions" and welcomed the opportunity to collaborate with Spain on a path forward "that supports responsible innovation, transparency, and user protection in prediction markets." Kalshi declined to comment.

Spain joins a lengthening list of European jurisdictions treating prediction markets as unlicensed gambling. France's national gaming authority blocked Polymarket in late 2024, and Belgium, Poland and Italy issued bans of their own. The Dutch gambling regulator KSA threatened Polymarket with fines of 420,000 euros per week if it continued serving Dutch users. India issued a formal blocking order against Polymarket on May 21, reclassifying prediction markets as "money games" under online gaming rules that took effect May 1. Indonesia and Brazil also issued bans in recent weeks.

The two platforms together processed several billion dollars in trading volume around the 2024 US presidential election and have continued expanding into sports, geopolitics and corporate-event contracts. Kalshi was recently valued at $22 billion after a $1 billion funding round, while Polymarket was valued at $15 billion. Combined weekly notional volume across both platforms stands at $6.1 billion, according to DeFi Rate.

The Spanish action comes as prediction markets face intensifying scrutiny on both sides of the Atlantic. In the US, the Commodity Futures Trading Commission under President Donald Trump's chair Michael Selig has asserted exclusive federal authority over the platforms, filing lawsuits against states including Minnesota, Illinois and Rhode Island that attempted to regulate or ban them. Minnesota became the first state to make operating prediction markets a felony under a bill signed by Gov. Tim Walz.

The US House Oversight and Government Reform Committee launched a probe into Kalshi and Polymarket on May 22 over insider trading concerns, citing "suspiciously timed trades" ahead of US military actions against Iran. A US soldier was charged with using classified information about the capture of Venezuela's Nicolas Maduro to win more than $400,000 via gambling platforms. In France, an individual allegedly used a hairdryer to warm a weather sensor and bet on the resulting temperature spike on Polymarket, walking away with $34,000.

There is no harmonized EU framework for event-based contracts, meaning each member state applies its own gambling or financial rules. The Spanish probe is scheduled to conclude in late summer, and the outcome could set a precedent for how other European Union countries treat the fast-growing prediction market sector.

This article is for informational purposes only and does not constitute investment advice.