Kalshi and Polymarket are facing a precautionary block in Spain after the gambling regulator and government commenced disciplinary proceedings against the duo.
In a notice posted on the Ministry of Social Rights, Consumer Affairs and Agenda 2030 website, the government department alleged the pair had violated gambling regulations.
The prediction markets, which are both based in New York, have enjoyed a surge in popularity since the 2024 US presidential election.
They are federally regulated in the US by the derivatives regulator, the Commodity Futures Trading Commission, and insist event contracts are financial instruments, not ‘bets’.
However, across Europe, local regulators have deemed prediction markets as a form of gambling, given their close resemblance to betting exchanges.
As a result, the Directorate General for Gambling Regulation (DGOJ) has opened disciplinary proceedings against Kalshi and Polymarket for operating in Spain without a licence.
Secondly, as published in the Official State Gazette, Spain’s Consumer Affairs Department has ordered the blocking of both sites until a resolution is found.
The process is expected to take between three and four months to complete, the government said.
Attempts to engage with Kalshi and Polymarket prior to the official proceedings and precautionary blocking were “unsuccessful”, the government added.
The DGOJ website lists 54 companies that have a sports betting licence, with several of those licensees running multiple sites in the country.
Major international players such as Entain, evoke, bet365, Betsson, Flutter and Betway all hold licences in the market.
Flutter runs the Betfair Exchange in Spain which is the closest equivalent to the likes of Kalshi and Polymarket.
Earlier this year, CIRSA CEO Antonio Hostench said his company would roll out a prediction markets product in Spain, but that the threat from Kalshi was minimal due to the regulatory environment in the Iberian nation.
The CEO said the likes of CIRSA, which runs the Sportium brand, were “200% protected” against US-based prediction markets.
A government statement read: “The regulatory authority points out that Spain, in line with other European jurisdictions, considers prediction markets to be gambling when bets are placed on uncertain future outcomes.
“Therefore, operating them in Spain requires a specific administrative licence.
“Furthermore, the DGOJ warns that unauthorised operators lack the technical and regulatory safeguards required in Spain, including identity verification systems, mechanisms to control access by minors and individuals who have self-excluded or are prohibited from gambling and the necessary supervisory standards to protect users.”
Spain’s action follows that from Dutch authorities earlier this year, with the Netherlands Gambling Authority (KSA) banning Polymarket from operating in the country.
Earlier this month, Kalshi was valued at $22bn after a Series F funding round raised $1bn for the business.
Polymarket is reported to be in talks over a $15bn valuation. The company also relaunched in the US recently.
The post Spain blocks Kalshi and Polymarket and opens disciplinary proceedings first appeared on EGR Intel.
Prediction markets to face three-to-four-month regulatory investigation as part of pushback from government and regulator
The post Spain blocks Kalshi and Polymarket and opens disciplinary proceedings first appeared on EGR Intel.