Spain Cracks Down on Prediction Markets, Blocks Polymarket and Kalshi

Spain prediction markets have encountered a major regulatory obstacle as the country’s Consumer Rights Ministry blocked Polymarket and Kalshi from operating within its jurisdiction. The platforms face a temporary ban lasting three to four months while authorities complete their investigation. This follows the news that Indonesia has just banned the prediction market platforms. Spain classifies prediction markets as gambling when bets are placed on uncertain outcomes, consequently requiring operators to obtain proper gambling licenses before offering services to Spanish residents. The ministry emphasized that unauthorized operators lack essential safeguards including identity verification systems and minor access controls.

Spain Bans Polymarket and Kalshi for Operating Without Licenses

The Spanish regulatory action follows a broader European crackdown that accelerated in late 2024. France initiated the enforcement wave when its National Gaming Authority blocked Polymarket, ruling the platform operated as unlicensed gambling. In the following months, Belgium, Poland, and Italy issued similar bans against prediction market operators.

Romania’s National Gambling Office blacklisted Polymarket in October after the platform hosted wagers on the country’s 2025 presidential election. The volume traded on that single event exceeded GBP 476.50 million, prompting Romania’s gambling authority president to declare that betting money on future results under counterpart bet conditions constitutes gambling requiring proper licensing, regardless of whether participants use traditional currency or cryptocurrency.

Hungary and Portugal recently joined the enforcement effort. Portuguese regulators stated the platform lacks authorization to offer bets and noted that betting on political events remains fundamentally prohibited under national law. France maintains a different approach, allowing only a “view only” mode that prevents active participation.

United States authorities have similarly challenged these platforms. Nevada’s Gaming Control Board filed a civil enforcement action seeking a court injunction against Polymarket for offering unlicensed bets. Tennessee instructed Polymarket, Kalshi, and Crypto.com to shut down sports prediction markets and refund wagers in early January. Polymarket now restricts access from approximately 33 jurisdictions worldwide, including Australia, Germany, the United Kingdom, Singapore, Taiwan, and the United States.

Why Does Spain Classify Prediction Markets as Gambling?

Multiple European nations justify their restrictions by applying existing gambling legislation to prediction markets. Great Britain’s Gambling Commission stated it does not believe prediction markets would classify as non-gambling products. The regulator explained that platforms enabling users to trade on event outcomes function as betting exchanges, falling within the definition of “betting intermediary” under the Gambling Act 2005.

The classification stems from structural similarities to traditional wagering. Some contracts offered on these platforms, such as predicting sports team victories, are effectively identical to sportsbook bets. The user-to-user exchange of risk characteristic of prediction markets exists within gambling frameworks.

Financial services legislation presents additional complexity. The Markets in Financial Instruments Directive (MiFID II) may apply to certain prediction market activities, particularly regarding binary options. ESMA noted that binary options receive fixed payouts when underlying prices reach specified levels, earning the designation “binary bets” due to their highly speculative nature and resemblance to fixed-odds betting.

France’s National Gaming Authority described prediction market platforms as displaying “addictive characteristics like those found in online gambling—but amplified by the absence of protective mechanisms that exist in the legal gambling market”. The regulator cautioned these platforms operate continuously without safeguards such as spending limits or identity verification. Spain prediction markets face similar scrutiny under this regulatory interpretation.

How Prediction Markets Grew Into Multi-Billion Dollar Industry

Prediction markets existed since 1988 when the Iowa Electronic Markets launched, designed to aggregate collective intelligence through financial incentives. The platforms remained confined to academic circles and niche internet communities for decades. The 2024 U.S. presidential election transformed the sector. Polymarket processed over GBP 0.79 billion in weekly trading volume during that cycle, legitimizing prediction markets as structured forecasting tools.

Between 2023 and 2024, leading platforms experienced over 1000% increase in trading volume and revenue. Polymarket and Kalshi dominated the space, contributing approximately 90% of the record-breaking GBP 1.87 billion trading volume recorded in the last week of October 2025. Monthly volumes surged from GBP 79.42 million to over GBP 10.32 billion by late 2025.

Growth rates rival the artificial intelligence boom. Bank of America identified Kalshi as one of the fastest growing non-AI companies in the U.S., with weekly trading volume expanding from GBP 79.42 million to more than GBP 2.38 billion within a year. Accordingly, Bernstein forecasts 2026 volumes reaching GBP 190.60 billion, representing a 370% increase. Platforms logged GBP 47.65 billion in market volume year-to-date in 2026, surpassing the GBP 40.50 billion total for all of 2025. Projections estimate GBP 0.79 trillion in annual trading volume by 2030.