Spain’s gambling regulator has suspended access to prediction market platforms Polymarket and Kalshi, citing the absence of mandatory gaming licenses. The Dirección General de Ordenación del Juego, overseen by the Ministry for Social Rights, has initiated formal sanction proceedings that will keep both operators inaccessible to Spanish users for a minimum of three to four months while a permanent ruling is prepared.

A Regulatory Classification Problem

Here’s where things get tricky. Spain’s authorities have a very clear view on this: if money changes hands based on an uncertain future outcome, it’s gambling. Full stop. That means the same licensing framework applies as for sportsbooks and online casinos. Neither Polymarket nor Kalshi holds those permissions.

The regulator’s formal complaint centres on consumer protection vulnerabilities inherent in unlicensed operations. Without mandatory identity verification procedures, Spanish officials argue there’s no effective mechanism to exclude minors or prevent self-excluded problem gamblers from accessing the platforms. These safeguards are non-negotiable under Spanish gaming law.

Then there’s the procedural headache. Regulatory notices served to both operators at their international registered addresses couldn’t be successfully delivered, which has only muddied the waters further.

Europe’s Fragmented Approach

Spain’s not alone in this. France implemented a similar ban two years ago. Germany, Belgium, Portugal, Switzerland, Romania, the Netherlands, and Poland have all blocked access to prediction market platforms. Polymarket especially has taken a battering across the continent.

That said, Europe’s response is nowhere near unanimous. Gibraltar recently awarded its first prediction market license, signalling a genuine appetite to attract the sector. Malta’s government is exploring a dedicated regulatory framework rather than outright prohibition. Economy minister Silvio Schembri has publicly indicated the island’s openness to the model.

What Happens Next

Once Spain issues its final decree, both platforms face three realistic options: apply for standard gambling licenses under Spanish law, mount a legal challenge to their regulatory classification, or implement permanent geographic blocking for Spanish IP addresses.

Fundamentally, this tension reflects how emerging market structures challenge traditional regulatory categories. Whether prediction markets function as financial instruments, betting products, or something entirely different remains contested across jurisdictions. Platforms and regulators are locked in a game of regulatory arbitrage with no clear endgame in sight.

What the team thinks

Carl Mitchell says:

Spain’s move here is a textbook example of regulators playing catch-up with innovation, and fair play to them for at least being transparent about the licensing gap rather than just quietly shutting these platforms down. What concerns me more than the suspension itself is whether Spain’s got a clear pathway for prediction markets to eventually operate legally, because if they don’t, we’re just looking at a permanent ban dressed up as a review, and that’s a missed opportunity for consumer protection and tax revenue. The real question the industry should be asking is whether other European regulators are quietly preparing similar actions, or if Spain’s becoming the test case that shapes how prediction markets get regulated across the continent.