Regulator orders market exit and warns of escalating financial penalties
Dutch Authority Moves Against Prediction Market Platform
The Dutch gambling regulator, the Kansspelautoriteit (KSA), has initiated formal enforcement proceedings against Polymarket, ruling that the platform has been offering gambling services without a valid licence. The authority concluded that Polymarket’s prediction-based contracts fall within the legal definition of games of chance under Dutch legislation.
As a result, the KSA issued a penalty order compelling the company to cease its activities in the Netherlands within a specified compliance window. The decision underscores the regulator’s firm stance on unlicensed operators targeting Dutch consumers, particularly in digital and crypto-enabled betting segments.
Compliance Deadline and Financial Sanctions
Under the terms of the enforcement order, Polymarket has been given a four-week period to withdraw from the Dutch market. Failure to comply could trigger substantial financial consequences, including recurring weekly fines.
The KSA warned that penalties may reach hundreds of thousands of euros per week, with cumulative sanctions capped at a defined maximum threshold. Regulators also retain the authority to pursue additional turnover-based penalties if non-compliance persists. This layered enforcement mechanism is designed to ensure rapid corrective action rather than prolonged disputes.
Why Polymarket’s Model Triggered Regulatory Action
Central to the regulator’s case was the classification of Polymarket’s offerings. Although the platform operates as a decentralised-style prediction market using cryptocurrency transactions, the KSA determined that users were effectively staking money on uncertain outcomes, a hallmark characteristic of gambling activity under Dutch law.
Investigators noted that Dutch residents could access the platform, register accounts, deposit funds, participate in markets, and withdraw winnings. The availability of contracts tied to political and societal events further reinforced the regulator’s assessment that the platform was facilitating betting-style activity without authorisation.
Polymarket’s Position on the Ruling
Polymarket has disputed the regulator’s interpretation, arguing that its platform functions as an information market rather than a conventional gambling product. According to the company, prices are shaped by user trading behaviour, knowledge, and market sentiment rather than by chance mechanisms engineered by an operator.
The firm maintains that participants engage in speculative trading driven by probability assessments. However, Dutch regulators rejected this distinction, emphasising that the economic reality of staking value on uncertain outcomes is sufficient for classification as gambling within the national legal framework.
Growing Scrutiny of Crypto and Prediction Markets
The Dutch action reflects a broader international trend: regulators are intensifying oversight of prediction markets and crypto-based wagering platforms. Authorities across multiple jurisdictions are increasingly unwilling to treat such models as regulatory grey areas.
For policymakers, concerns extend beyond licensing compliance to include consumer protection, financial risk exposure, and potential societal implications, particularly when markets involve elections or sensitive public events. The Polymarket case signals that innovative technology does not exempt operators from established gambling regulations.
Implications for the Global Betting Ecosystem
This development may influence how other regulators address similar platforms. Operators offering prediction-style products, especially those leveraging blockchain or digital assets, are likely to face closer examination regarding licensing obligations.
For the industry, the message is clear: regardless of business model innovation, regulatory alignment remains non-negotiable. Platforms operating across borders must proactively evaluate local legal definitions of gambling to mitigate enforcement risks and financial penalties.
