Polymarket is being banned in more and more countries
Some call them prediction markets, others see them simply as a new form of online betting: the two US companies Polymarket and Kalshi have experienced rapid growth since people started wagering money on future events (political events, sports results, currency movements, etc.). But in more and more countries, including the EU, bans on market leader Polymarket are now being imposed.
On Friday, both the Hungarian regulatory authority for regulated activities and the Portuguese gambling regulator issued bans against the platform. The Portuguese regulators justified their decision by stating that the website lacks authorization to offer bets in Portugal, and that betting on political events is fundamentally prohibited under national law. France has also already implemented restrictions, where there is only a “view only” mode so that people there cannot regularly participate in the prediction market.
Sports Betting, Not Forecasts
On the same day, the Nevada Gaming Control Board filed a civil enforcement action and sought a court injunction to prevent Polymarket from offering unlicensed bets. These steps follow a similar action in Tennessee in early January, where the state sports betting regulator instructed Polymarket, Kalshi, and Crypto.com to shut down their sports prediction markets and refund wagers.
Prediction markets have gained massive popularity over the past two years, particularly ahead of the 2024 US presidential election. The leading platforms Polymarket and Kalshi together record monthly trading volumes exceeding $13.5 billion and process more than 43 million transactions, according to a report by Dune and Keyrock from November 2025. However, the industry faces fundamental legal challenges as regulators increasingly question the platforms’ claims that they are not gambling providers. In many jurisdictions, including Portugal and Taiwan, betting on political events is explicitly prohibited, which directly challenges the business models of these markets.
The Line Between Financial Market and Gambling Blurs
The core of the controversy lies in the question of whether prediction markets should be classified as financial instruments or gambling offerings. Kalshi, currently facing a class action lawsuit in the Southern District of New York alleging the platform operates an illegal and unlicensed betting operation, vigorously defends its business model. The company’s CEO argues that prediction markets offer event contracts and not bets in the classical sense.
He compares the functioning to open financial markets, where participants trade against each other rather than against a betting shop. If one were to call prediction markets gambling, one would logically have to consider the entire financial market as such, according to his argument. Polymarket argues similarly: it is not a betting provider that takes the opposite side of every wager from customers, but rather an exchange where both sides of a trade can meet, similar to stock and derivatives exchanges.
Regulators do not share this view. Growing concerns about insider trading are further intensifying the situation. In early January, a Polymarket user earned over $436,000 after correctly betting that former Venezuelan President Nicolás Maduro would be removed from office before January 31. The bet was placed only hours before US forces intervened, leading to accusations that the user had advance information. The incident prompted Democratic Representative Ritchie Torres to draft legislation prohibiting federal employees from using prediction markets if they possess relevant insider knowledge.
Federal Thaw Meets State Resistance
At the federal level, however, there is a relaxation of the stance toward prediction markets, which corresponds with Trump’s positive attitude toward cryptocurrencies. In November 2025, the Commodity Futures Trading Commission approved Polymarket’s return to the US market. The platform had previously been banned and paid a $1.4 million fine in 2022 for regulatory violations. This federal opening stands in stark contrast to measures by individual states enforcing their own gambling laws.
The next phase of development will depend on who can shape markets that maintain open access while integrating transparency and compliance from the ground up. Whether Polymarket will be readmitted in jurisdictions like Portugal and Hungary remains unclear. The ban in Hungary is initially temporary, and legal experts do not completely rule out lifting the ban, though enforcement trends point to a harder stance by authorities.
