Key Takeaways
- Polymarket is challenging the Dutch ban in court, arguing it sells derivatives rather than bets.
- The KSA moved to collect a €420,000 ($471,000) penalty after ruling Polymarket blocked Dutch users too late.
- KSA inspectors placed a $1 bet on the next Dutch prime minister before ordering Polymarket out.
The Regulator Cited Polymarket’s Own Help Page
The case follows a Jan. 20 order against Polymarket’s operator to stop serving Dutch users within four weeks or pay €420,000 ($471,000) a week, up to €840,000 ($943,000). Netherlands Gambling Authority (KSA) inspectors had opened an account from a Dutch IP address, deposited €10 by card from a Dutch bank account and bought a $1 “Yes” share on Rob Jetten in the “Next Prime Minister of the Netherlands” market. The site also offered a Dutch-language AI chatbot, the order noted.
Polymarket has now confirmed it has gone to court to lift the ban, Dutch financial daily Het Financieele Dagblad reported. The company raised the typical industry argument that its event contracts resemble futures and should be supervised by the Netherlands Authority for the Financial Markets (AFM) rather than the KSA.
Polymarket says it switched on IP blocking on Feb. 18, but the deadline had expired the day before, so the regulator ruled €420,000 forfeited and moved to collect it in May. In its objection, the company argued that users trade positions with each other through an open-source protocol on the Polygon blockchain, with no house and with outcomes settled by an automated oracle, and pointed to the Commodity Futures Trading Commission’s oversight of comparable U.S. platforms.
The KSA rejected the objection on June 23, dryly noting that people were betting on the next pope in 16th-century Italy. It also quoted Polymarket’s help center, which describes the platform as a way to “profit from your knowledge by betting on future events.” Dutch law bars betting on non-sports events even for licensed operators, the regulator added, and licensees cannot accept crypto because anonymous payment methods are prohibited.
Gambling lawyer Micha Schimmel told the Financieele Dagblad he gives the case little chance, citing a 2015 ruling that a service can be a financial product and still count as gambling. Recasting the contracts as derivatives also carries its own risk in Europe, where the EU’s markets watchdog has warned that event contracts meeting the definition of financial instruments fall under existing curbs on binary options for retail investors.
The Netherlands is one of a growing list of countries treating Polymarket as unlicensed gambling. The KSA’s decision names Argentina, Australia, Belgium, Brazil, France, Hungary, Japan, Poland, Portugal and Spain. The latter’s gambling regulator opened sanctioning proceedings against Polymarket and Kalshi in May. The KSA has also warned that a revenue-based fine for the illegal offering could still follow.
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