Spain bans Polymarket and Kalshi over unlicensed gambling rules

Spain has cut Polymarket and Kalshi off from operating in the country after its Consumer Rights Ministry concluded that both U.S.-based platforms were doing business without the gambling licence Madrid requires. The order, published in Spain’s Official State Gazette, triggered sanction proceedings by the Dirección General de Ordenación del Juego, the gambling watchdog that now has about three to four months to complete its probe.

The decision goes to the heart of how Europe may define prediction markets. Spanish regulators treat them as gambling when users place bets on uncertain future outcomes, not as a neutral financial-information service. That distinction matters for election traders, sports-style event speculators and platforms pitching themselves as a new category of market. In Spain’s view, the issue is not only market access. It is whether a product that prices future events should be regulated like wagering when money changes hands on a contingent outcome.

The ministry’s case also rests on consumer protection. Officials said unauthorized operators lack the safeguards required under Spain’s gambling framework, including identity verification, age controls and tools to block people who have self-excluded or been barred from gambling. Spain’s gambling law, Law 13/2011 of May 27, 2011, was built around those protections, along with preventing addictive behavior and shielding minors and other vulnerable users. That legal architecture gives regulators a broad basis to treat unlicensed prediction platforms as a safety problem, not just a licensing dispute.

The timing is significant. Prediction markets moved from a niche corner of the internet into a multi-billion-dollar industry after gaining traction in U.S. politics in 2024, and that surge has drawn closer scrutiny from European regulators. Polymarket was reported to be valued at about $8 billion in late 2025 after an investment tied to Intercontinental Exchange, while Kalshi was reported near $5 billion around the same period. For companies trying to expand across borders without country-by-country licensing, Spain’s move is a warning: a fast-growing product can still be treated as gambling at the border, and that classification could harden across the European Union before the industry settles the argument on its own terms.