Spain Blocks Polymarket and Kalshi Over Gambling Law Violations
In brief
- Spain's Directorate General for Gambling Regulation issued a disciplinary order blocking Polymarket and Kalshi
- Platforms face three to four months of suspension during regulatory proceedings
- Spain cites missing identity verification, minor-access controls, and user-protection standards
- Indonesia, Thailand, and India have also restricted prediction market access
Spain's Gambling Regulator Cracks Down
Spain's Ministry of Social Rights, Consumer Affairs, and Agenda 2030 opened disciplinary proceedings against both platforms for operating without proper licensing. The regulator determined that prediction markets qualify as gambling when bets are placed on uncertain future outcomes, and therefore require specific administrative licenses to function legally in the country.
The Spanish gambling authority noted that Polymarket and Kalshi lack proper safeguards, including identity verification systems, mechanisms to control access to minors, and supervision standards for user protection. These gaps in compliance infrastructure formed the basis for the enforcement action.
Global Regulatory Pressure Intensifies
Spain is not alone in restricting these platforms. Indonesia instituted a ban against Polymarket last week, citing that use of the platform constituted gambling. Thailand and India have also made moves towards blocking the platforms, signaling a broader shift in how Asian and European regulators view prediction markets.
The timing reflects growing scrutiny of prediction market activity. Polymarket generated more than $5 billion in monthly trading volume in May, while Kalshi reached $13.7 billion in the same period. The platforms have surged in popularity this year, attracting institutional and retail attention.
Mounting Concerns Over Misuse
Recent incidents have raised questions about market integrity and national security. A U.S. soldier was charged in April with placing Polymarket bets using confidential information, allegedly netting over $400,000 from predictions around the removal of Venezuelan President Nicolás Maduro. Additionally, a group of wallets netted around $2.4 million in profits on Polymarket markets related to the Iran War.
These concerns have reached Capitol Hill. House Republicans opened an investigation into Polymarket and Kalshi last week, with one congressman stating that Congressional action may be necessary regarding prediction market platforms. The regulatory pressure reflects broader unease about how these platforms operate and who profits from them.
