Spain Blocks Kalshi and Polymarket, Citing Lack of Gambling Licences

Spain has initiated proceedings against the two US-based prediction market platforms Polymarket and Kalshi and has provisionally blocked their websites. The authorities accuse the companies of operating in the Spanish market without the required gambling licence. Similar measures have since been taken in other EU countries as well as in several US states.

The Spanish Ministry of Social Rights, Consumer Affairs and the 2030 Agenda has opened official sanctions proceedings against Polymarket and Kalshi through the Dirección General de Ordenación del Juego (DGOJ). Both platforms are alleged to be operating in Spain without the mandatory regulatory authorisation, which constitutes a violation of Spanish gambling law.

As an immediate measure, the Ministry has issued an order to block the websites of both platforms. This block serves as a provisional precautionary measure and remains in effect until a final decision is reached in the sanctions proceedings. The proceedings themselves are expected to last three to four months. Notice of the initiation of proceedings was served via the Official State Gazette (BOE), as direct attempts to serve the foreign-based operators had been unsuccessful.

The DGOJ emphasises that unlicensed operators fail to meet essential protection standards, including identity verification, access controls for minors, and mechanisms to protect individuals who have self-excluded from gambling.

On prediction markets, users buy and sell shares that reflect the outcome of future events. The prices of these shares reflect the collectively estimated probability of a particular outcome. Trading takes place on events in the areas of politics, economics, sports, or weather.

The platforms themselves do not consider themselves traditional betting providers, but rather exchanges where buyers and sellers face each other, similar to stock or derivatives markets. However, regulatory authorities in numerous countries do not share this view and classify the business model as gambling.

Spain is not the only European country taking action against Polymarket and Kalshi. In recent months, several EU member states have taken measures:

In the United States, regulatory measures against the industry are also mounting. The Nevada Gaming Control Board has filed a civil enforcement action and applied for a preliminary injunction to prevent Polymarket from offering unlicensed bets.

As early as the beginning of January, the sports betting regulator of the state of Tennessee had ordered Polymarket, Kalshi, and Crypto.com to shut down their sports prediction markets and refund bets placed. In addition, Kalshi faces a class action lawsuit in the Southern District of New York, in which the company is accused of operating an illegal and unlicensed betting operation.

Polymarket and Kalshi have grown significantly in importance over the past two years, particularly around the 2024 US presidential election. According to a report by Dune and Keyrock from November 2025, the two platforms together record monthly trading volumes of over 13.5 billion US dollars and more than 43 million transactions per month.

This growth is, however, increasingly attracting the attention of authorities. In addition to the fundamental question of licensing requirements, the issue of insider trading is also coming into focus. At the beginning of January, a Polymarket user had earned over 436,000 US dollars after correctly betting on Nicolás Maduro's loss of power shortly before a US intervention in Venezuela. The incident prompted Democratic congressman Ritchie Torres to draft a bill that would prohibit federal employees with relevant insider knowledge from using such platforms.

Regulatory authorities in Europe and the United States take a fundamentally different view and are increasingly tightening their stance towards the industry. Whether prediction markets will establish themselves in the long term as an independent asset class or fall under gambling law is likely to be decided in numerous proceedings in the coming months.