- The Dutch gaming authority banned Polymarket, which claims to be the largest prediction market in the world, from operating on the grounds of violating gaming law.
- Polymarket, in fact, does not have a gambling license anywhere in the world, but it happily offered bets on real events, including election betting, which is generally banned in the Netherlands – even with a license.
An agency official was able to easily place an election bet on politician Rob Jetten. After this factual evidence, the authorities intervened and ordered this Operating ban for Polymarketcombined with a penalty of 420,000 euros per week, but a maximum of 840,000 euros.
The authority said it had previously contacted Polymarket, but there was no response. The measure now imposed is intended to ensure that Polymarket packs its bags immediately. One or two suitcases of money might also be there.
Head of the authority becomes clear
Ella Seijsener, director of licensing and supervision at the NL Gambling Authority, left no room for interpretation in her statement:
“Prediction markets are on the rise, including in the Netherlands. Such companies offer bets that are fundamentally not allowed on our market – not even for license holders. In addition to the social risks of such predictions, such as the possible influence on elections, we note that this is illegal gambling. Anyone who does not have a license has no place in our market. This also applies to these new gambling platforms.”
The authority also pointed to a lack of consumer protection, a lack of transparency and unclear dispute resolution mechanisms. These factors would increase the risk for consumers and are incompatible with the Dutch regulatory framework.
EU states are tightening their course towards forecast markets
The Netherlands is not the first EU country to take action against Polymarket. In recent months, Portugal, Italy, Belgium, Romania, France and Hungary have already taken measures against Polymarket, ranging from functional restrictions to a complete ban on operations.
A clear picture emerges: the EU states view prediction markets as games of chance that are subject to regulation – and also tax – and react accordingly in a restrictive manner.
For Polymarket this de facto means the loss of the EU market. The company received a fine from the US Securities and Exchange Commission (CFTC) in the USA as early as 2022. Now it is once again the focus of national supervisory authorities, who also don’t understand fun.
Prediction markets will show their colors or disappear
The Dutch approach is likely to consolidate the legal classification of forecast markets in the EU. While proponents emphasize their “informational value”, regulators see above all the danger of manipulative incentives and the potential influence on democratic processes.
The question for Polymarket now arises as to whether the company will adapt its business model and call a spade a spade, or whether it will have to withdraw from further European markets.
In any case, the development shows that EU states will not allow themselves to be fooled by companies that want to transform pure gambling into something more serious by simply calling it a “prediction market”.
Just a few days ago, Ethereum inventor Vitalik Buterin warned about exactly this.
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