The Spanish Gambling Regulatory Authority has thrown a heavy punch. On Tuesday, the DGOJ announced a temporary ban on the international prediction market platforms Polymarket and Kalshi, citing their unlicensed operations within Spain. The ban will last three to four months, which is the time window from the start of the formal investigation to the final decision. The penalty notice has been officially published in the "Official State Gazette," making this a done deal.
This regulatory action, which directly classifies prediction markets as gambling, is also worth a separate analysis in the European policy tracking on the PASA official website.
The legal logic behind the temporary ban
The DGOJ's stance is clear: prediction markets are essentially gambling because they involve "betting on uncertain future outcomes." According to Spanish gambling regulations, any platform offering such services must have a specific administrative license. Polymarket and Kalshi obviously do not.
Interestingly, before officially issuing the penalty notice, the regulatory body tried to contact these two platforms through known overseas addresses, but to no avail. In other words, the platforms are doing business on Spanish territory, and the regulator couldn't even give a heads-up, which is intolerable for anyone. The penalty procedure has now completed the public announcement step, but the final decision still awaits three to four months. Once the dust settles, the platforms face three choices: honestly apply for a Spanish license, legally challenge their classification as gambling, or adjust their service content to circumvent regulatory red lines.
Consumer protection is a major issue
What really made the DGOJ uneasy is not just the unlicensed operation. During the investigation, the regulatory body listed a series of consumer protection issues: lack of an effective identity verification system, inability to block minors and self-excluded individuals, and standards far behind regulatory norms. Plainly put, failing even the most basic identity verification, the platforms claim to protect users, but do they believe it themselves?
The attitude towards prediction markets in Europe is currently best described as "divided." Spain is not the first to take action. Polymarket was banned in France as early as 2024, with the French classification likely violating national laws. Including Germany, Belgium, Portugal, Switzerland, Romania, the Netherlands, and Poland, the list of European countries banning Polymarket is already long.
But the other side of the coin is also worth pondering. Earlier this year, Gibraltar issued the first prediction market operator license, and in March, the Maltese Minister of Economy publicly stated that they are "actively exploring this emerging field of prediction markets," aiming at a potential regulatory framework. Some countries ban, some welcome, and the tug of war between these two approaches seems endless for now.
The focus of the debate is on classification
Ultimately, all controversies surrounding prediction markets point to one core issue: what exactly are they? Platforms like to package themselves as "prediction tools" or financial products, as far away from the word "gambling" as possible. Meanwhile, regulators focus on consumer protection, and the logic is understandable—as long as it involves betting on uncertain future events, it must be tightly regulated by gambling laws. Whether it's gambling, a financial product, or a prediction tool, this issue has not been settled in the regulatory circles.
This move by Spain, although ostensibly targeting two platforms' individual cases, actually steps into the regulatory quagmire that all of Europe is struggling with. The final decision in three to four months will not only determine the fate of Polymarket and Kalshi in Spain but may also provide a case reference for other parts of the European market that are still watching.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel:https://t.me/pasa_news
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PASA official website: https://www.pasa.news
