Over the last two years, prediction markets have become one of the most contested issues in global gambling and financial regulation. These platforms have attracted significant public attention by allowing users to trade on the outcome of political elections, economic indicators, sporting events and a wide range of other real-world developments.
Spain has now taken formal action. Following unsuccessful attempts to notify the companies abroad, the initiation of sanctioning proceedings and the adoption of a precautionary blocking measure have been published in the Official State Gazette.
The measure, announced by the government, blocks access to the platforms’ websites pending resolution of the case. The proceedings are based on the alleged provision of betting services in Spain without the required authorisation and are expected to last around three to four months.
In this context, Spain’s temporary blocking of Polymarket and Kalshi should be understood not as a general prohibition of prediction markets as a technology, but as an enforcement action under Spanish gambling law.
In legal terms, the central allegation is that, when offered to users in Spain, these products may fall within the Spanish legal concept of gambling. On that basis, the platforms may have organised, offered or exploited activities within the scope of Law 13/2011 on gambling regulation – the Spanish Gambling Act – without holding the corresponding licence.
If the regulator’s interpretation ultimately prevails, the alleged conduct could constitute a very serious administrative infringement with fines ranging from €1m (£860,000) to €50m, plus disqualification from gambling activities for up to four years. In practice, however, experience suggests that, if a sanction is imposed, it would most likely materialise in a €5m fine and exclusion from the market for four years.
A fair exchange
The government’s description of these platforms points to exchange betting. Under the Spanish gambling regulation, these are: bets formed by matching positions submitted by different participants, with the operator acting as intermediary and guarantor of the amounts risked. This classification has immediate consequences. A platform cannot lawfully target the Spanish market merely because it is regulated in another jurisdiction.
The temporary block also has a specific legal character. It is not necessarily the final sanction. Spanish gambling law allows the regulator to adopt provisional measures during sanctioning proceedings where necessary to protect the public interest and ensure the effectiveness of the final decision. It also permits measures addressed to intermediary service providers to interrupt illegal gambling services or remove unlawful gambling content offered through information-society services, provided that those measures are objective, proportionate and non-discriminatory.
Once the temporary block is lifted, or, more precisely, once the sanctioning proceedings are resolved, the first question will be whether the proceedings conclude with a finding of infringement. If they do, the temporary interruption of access may be replaced by a definitive enforcement measure, together with a fine and, potentially, a period of disqualification from obtaining a Spanish gambling licence. For the platforms, that would mean that the Spanish market remains closed unless the sanction is overturned or the period of ineligibility expires.
Predict the future
After that, two main scenarios arise. The first is exiting the Spanish market instead of regularising their activity. The platforms could stop targeting Spain, geoblock Spanish users and avoid Spanish-language promotion or services directed at residents in Spain. That would reduce enforcement exposure but would not amount to lawful entry into Spain; it would simply limit the territorial connection triggering the licensing requirement.
The second is a licensed return. In principle, event-based markets could be offered in Spain if structured within the existing gambling framework. But that path would require the appropriate legal vehicle, solvency and guarantee requirements, the relevant licences, approved technical systems, participant-protection measures and ongoing supervisory compliance.
For the Spanish market, the immediate consequence is not the disappearance of prediction markets, but its regulatory reclassification. The proceedings reflect the regulator’s view that, under the current legal framework, these products cannot operate outside the existing licensing perimeter.
The practical effect of any future lifting of the block is unlikely to be a simple return to the previous product. The platforms either remain outside the Spanish market, enter through the Spanish licensing regime, or challenge the regulator’s classification and measures through administrative and judicial channels.
If they choose the licensing route, the Spanish version of prediction markets would not simply be a regulated copy of the existing global product, since Spanish gambling law does not allow an unlimited catalogue of event markets, among other relevant differences.
In any event, the coming months will show how the proceedings evolve and what impact they have on the Spanish gambling sector. Spain’s preliminary answer appears clear: if prediction markets target Spanish consumers, they are likely to be treated as gambling.
Marta de Francisco is a lawyer at Asensi Abogados, specialising in the gaming and gambling sector. Her practice focuses on day-to-day regulatory and compliance matters, advising leading international operators with business activities in Spain, as well as key stakeholders across the industry. She regularly contributes to legal and industry publications and participates as a speaker at sector conferences
The post Pain in Spain: the fallout from the official ban on Kalshi and Polymarket first appeared on EGR Intel.
Marta de Francisco from law firm Asensi Abogados outlines what to expect from the disciplinary proceedings launched by the Spanish government against the prediction market giants
The post Pain in Spain: the fallout from the official ban on Kalshi and Polymarket first appeared on EGR Intel.