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Regulators in Europe have escalated their focus on online prediction platforms, with a new polymarket ban in the Netherlands highlighting the sector’s mounting legal risks.
Dutch regulator orders Polymarket to exit the market
The Netherlands Gambling Authority (Ksa) has issued a penalty order against Adventure One QSS Inc., operator of the Polymarket platform, for providing what it calls illegal gambling services without a license. The decision, published on Tuesday, follows growing regulatory scrutiny since 2024.
According to the Ksa, Polymarket must immediately stop offering services to Dutch users. If the company does not comply, it faces a fine of 420,000 ($462,000) per week, capped at a total of 840,000 ($924,000). However, the regulator did not specify whether previous activity would trigger retroactive sanctions.
“Prediction markets are on the rise, including in the Netherlands,” said Ella Seijsener, director of licensing and supervision at the Ksa. She argued that these companies offer bets that are never permitted in the Dutch market, even for licensed operators, underscoring the watchdog’s restrictive stance.
Seijsener cited “social risks” associated with prediction platforms, “for example, the potential influence on elections.” She concluded that the platform “constitutes illegal gambling” and stressed that anyone without a Ksa license “has no business in our market.” Moreover, she said this applies equally to new online gambling models.
Prediction markets face mounting global regulatory pressure
The Dutch enforcement move comes amid a sharp rise in the popularity of prediction platforms worldwide. Over the past two years, Polymarket and its main competitor Kalshi have experienced explosive growth, particularly around major political events such as the 2024 U.S. presidential election.
Combined monthly trading volumes on leading platforms exceed $13.5 billion, with more than 43 million transactions processed, according to a November 2025 report by Dune and Keyrock. However, that expansion has also drawn heightened attention from regulators across multiple jurisdictions.
The controversy centers on a fundamental dispute over classification. Operators insist they are not running gambling sites but facilitating markets where users trade contracts linked to future events. Regulators, however, increasingly argue that staking money on uncertain real-world outcomes fits the economic definition of betting.
As platforms expand into politics, sports and macroeconomic events, authorities are re-examining whether existing gambling rules should apply. That said, the legal status of prediction markets remains fragmented, with different countries and even individual U.S. states adopting divergent interpretations.
Business expansion continues despite legal headwinds
Despite the latest polymarket ban in the Netherlands, the company continues to push forward with commercial partnerships. On Wednesday, it announced a deal with Substack that will allow authors to integrate live market data directly into their newsletters.
Polymarket framed the initiative as a way to support>Are prediction markets gambling or financial instruments?
Operators of these platforms argue that their products resemble financial instruments rather than traditional wagers. Kalshi co-founder and CEO Tarek Mansour said in April 2025 that the company offers “event contracts,” not bets, describing its marketplace as “an open financial marketplace” where users trade against one another.
In his view, that model contrasts with conventional bookmakers that take the opposite side of customers’ wagers. “If we are gambling, then I think you are basically calling the entire financial market gambling,” Mansour said at the time, underscoring the industry’s pushback against the gambling label.
However, regulators in multiple regions remain unconvinced. Kalshi is currently defending a class action lawsuit in the Southern District of New York alleging that it operates as an “illegal and unlicensed sports book.” This case adds to a growing list of prediction markets regulation lawsuit actions and enforcement measures worldwide.
Polymarket and other platforms have faced legal or regulatory challenges in U.S. states, the UK, France, Germany, Italy, Australia, Singapore, Portugal, Hungary, Thailand and now the Netherlands, among others. Moreover, dozens of lawsuits are reportedly pending in the U.S. alone involving federal authorities, Native American tribes, investors and gambling regulators.
Dutch regulatory culture and its implications for crypto-linked markets
Jan Scheele, board member at the Blockchain Netherlands Foundation, said the Ksa’s action fits the Netherlands’ established regulatory culture. “This would not be considered unusual in the Dutch context,” he said, noting the country’s reputation for relatively strict licensing and compliance standards, including in crypto and digital assets.
Authorities generally expect companies to obtain the correct approvals before serving Dutch users and to show ongoing compliance with consumer protection and anti-money laundering rules. However, Scheele noted that regulators also pay close attention to the substance of products rather than just their branding or technical structure.
According to Scheele, Dutch regulators often adopt a proactive enforcement stance when they believe firms are operating without authorization or breaching legal obligations. “It reflects a regulatory culture that prioritises consumer protection and systemic integrity over a more permissive, innovation-first approach,” he said, describing a framework that can be challenging for fast-moving crypto and fintech ventures.
From a regulatory perspective, authorities typically examine what a product allows users to do. If users can stake value on uncertain real-world events and receive a financial return when correct, the activity can closely resemble betting in economic and behavioral terms, even when the interface looks like a trading platform and transactions settle in crypto-assets.
Informational value versus gambling classification
At the same time, Scheele acknowledged that some platforms may offer informational benefits by aggregating dispersed knowledge and signaling expectations about future events. In theory, such markets could help with decision-making or risk management that goes beyond pure entertainment wagering.
However, under current Dutch law, those potential benefits do not override the requirement for a gambling license if the activity meets the legal definition of betting. This creates a structural tension between innovation in event-based trading and the existing framework governing gambling and consumer protection.
For now, the Dutch decision reinforces a global pattern: as the prediction markets ecosystem scales, regulators are increasingly inclined to treat many of these platforms as gambling operators. The outcome of ongoing court cases and enforcement actions will be critical in shaping future prediction markets regulation and the viability of crypto-linked event trading.
In summary, the Netherlands has signaled that unlicensed prediction platforms will not be tolerated, adding another major jurisdiction to the list of markets challenging Polymarket and its peers. How companies adapt their models and navigate licensing regimes will likely determine whether the sector matures into regulated financial infrastructure or remains confined to a contested legal gray zone.
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