Dutch KSA Upholds Illegal Gambling Ruling Against Polymarket

The Dutch gambling authority, Kansspelautoriteit (KSA), has confirmed its enforcement action against the prediction market platform Polymarket, rejecting an appeal lodged by its operator, Adventure One QS. This decision upholds the regulator's previous finding that Polymarket was offering unauthorized gambling services within the Netherlands. The initial order, issued in February, mandated Polymarket to cease operations targeting Dutch customers or face escalating weekly fines, potentially reaching a maximum of €840,000. Polymarket reportedly missed the compliance deadline of February 17, implementing IP-blocking measures only a day later.

Polymarket's appeal contended that its platform did not fall under the definition of gambling, for which it lacks a Dutch license. Instead, Adventure One QS described its service as a mere interface for the open-source blockchain protocol Polygon, enabling users to engage in peer-to-peer position trading via cryptocurrency wallets. The company further argued that its product is, in some jurisdictions, categorized as a financial instrument.

However, the KSA dismissed these arguments, asserting that the inherent element of chance within Polymarket's offerings unequivocally rendered it a gambling service. The regulator stated that Polymarket provided Dutch users “an opportunity to compete for prizes or rewards” by placing wagers on the outcomes of future events, thereby fulfilling the legal criteria for gambling under Dutch law. The KSA also clarified that the integration of blockchain technology, crypto wallets, or decentralized protocols does not grant exemption from the nation's gambling regulations. Furthermore, Polymarket's own promotional content, which included phrases such as “betting on future events,” appeared to contradict its defense.

During its initial investigation, the KSA determined that Polymarket was not only readily accessible but also effectively targeted users in the Netherlands. Evidence included the availability of registration for Dutch IP addresses, the provision of a Dutch-language AI chat function for customer service, and the presence of markets specifically related to Dutch political events and sports figures. Wagering on political outcomes is explicitly prohibited under Dutch gambling legislation.

Polymarket's additional claims—that the KSA's sanction was disproportionate, legally vague, and insufficiently justified—were also rejected. The regulator affirmed that it had clearly communicated the legal basis for its order, actively sought and considered submissions, and provided comprehensive reasoning for its decision. The KSA also defended its choice to publicly disclose the enforcement action, despite Polymarket's parent company expressing dissatisfaction with this “naming and shaming.” Citing the Dutch Open Government Act, the regulator justified its transparency on the grounds of consumer protection, regulatory clarity, and the importance of deterring similar unlicensed activities.

This case highlights a growing regulatory scrutiny of prediction platforms across Europe, echoing similar conflicts observed in the United States. Recently, nine European regulators announced a collaborative initiative to address consumer protection and market integrity risks associated with such platforms. Separately, Germany's gambling regulator, the GGL, has initiated an investigation into FIFA partner ADI Predictstreet, which secured a Gibraltar gambling license earlier this year. The European Securities and Markets Authority (ESMA) has also cautioned that certain prediction products structured as “yes-or-no” contracts with fixed payouts might be classified as restricted financial instruments, potentially falling under prohibitions on binary options for retail consumers within the EU.