European Regulators Challenge Prediction Markets
The burgeoning world of prediction markets is facing a formidable challenge in Europe. Unlike the United States, where the debate centers on whether these platforms are financial derivatives or sports betting, many European authorities have taken a hardline stance. They are increasingly classifying these services as a form of illegal gambling, leading to widespread blocks.
France’s gambling authority, the Autorité Nationale des Jeux (ANJ), investigated Polymarket in 2024 and concluded its services were unauthorized. This prompted the platform to geoblock French users. The ANJ warned that these sites exhibit addictive traits without the consumer protections found in the legal market, such as spending limits or identity verification.
This sentiment is echoed across the continent. Jurisdictions including the Netherlands, Germany, Belgium, Portugal, and Switzerland have also blocked access to Polymarket. The Dutch regulator, KSA, issued a cease-and-desist order, threatening a fine of €840,000, arguing that prediction markets are an unlicensable game of chance under current Dutch law.
"First, prediction markets are considered games of chance. Second, as a product category they are, in principle, unlicensable," explains Justin Franssen, a lawyer at Franssen Tolboom, highlighting that Dutch law explicitly forbids betting on events like U.S. presidential elections.
Spain Launches Comprehensive Safe Gambling Programme
In Spain, the Directorate General for the Regulation of Gambling (DGOJ) has introduced its Safe Gambling Programme 2026–2030. This new strategy aims to enhance consumer protections, with a strong focus on younger individuals. The plan was prompted by demographic shifts showing increased gambling participation among those aged 18 to 25.
The DGOJ is particularly concerned with the influence of social media, video games, and AI on gambling patterns. The programme, supported by a €1 million research grant, includes 24 specific measures. Key goals include developing a standardized system for detecting risky online behavior and evaluating the impact of recent Royal Decrees that tightened advertising and account controls.
The initiative will also produce public guidance on risky behaviors, create a directory of support services, and strengthen collaboration with national addiction frameworks.
UK Forms Research Body Funded by Statutory Levy
The United Kingdom is advancing its efforts to address gambling harms through a new, evidence-led approach. The UK Research and Innovation (UKRI) body is actively forming its Gambling Research Programme and is currently recruiting a head of department to lead the initiative. The position is for a fixed term of 24 months within the Arts and Humanities Research Council (AHRC).
This programme is funded by the industry's new gambling statutory levy, which came into effect in April of last year. The levy directs its funds as follows:
- 50% for treatment and support services.
- 30% for strengthening gambling harm prevention.
- 20% for the UKRI's Research Programme on Gambling.
The levy, which generated £120 million in its first nine months, aims to create a robust governance framework for research, education, and treatment (RET) funding, moving away from the previous voluntary system managed by GambleAware.
Global Market Developments: Kazakhstan and Estonia
Internationally, two nations have made headlines for very different reasons. Kazakhstan has approved four new casino zones exclusively for international tourists. This strategic move aims to boost tourism and drive economic growth in less-developed regions, including areas near the Caspian Sea and Lake Alakol.
| Feature | Existing Kazakhstan Zones | New Tourist-Only Zones |
|---|---|---|
| Audience | Locals and Foreigners | Foreign Visitors Only |
| Goal | Domestic Gambling Hub | Drive Inbound Tourism |
| Economic Impact (Projected) | Established | ~500 jobs per casino, 200k tourists |
Meanwhile, Estonia has corrected a significant legislative error. A typo in the Gambling Tax Act accidentally eliminated the tax on remote gambling for the year. An adviser allegedly responsible for the mistake was dismissed, and lawmakers have since passed a revised version of the act. Estonia plans to gradually lower its gambling tax from 6% to 4% by 2029 to position itself as an iGaming hub, with the online gambling tax expected to generate around €27 million in 2026.
The Future of Prediction Markets Regulation
Despite the regulatory blocks, data suggests a persistent demand for prediction markets in Europe. Ismail Vali of Gaming Compliance International (GCI) notes that significant user traffic from blacklisted jurisdictions continues, as operators use mirror domains and other methods to bypass restrictions.
Vali reports that prediction markets accounted for about 7.9% of illegal sports betting revenue in 2024 and projects this to reach 10% in 2025. This raises a crucial question for the future of European gambling regulation. While some, like German lawyer Wulf Hambach, see a potential path forward by regulating these products as financial instruments, others are more skeptical.
"The regulatory questions that are being raised are identical to the ones that were being raised back then [with Betfair]. I haven’t seen a single thing said about prediction markets that didn’t come up at the time," says Mark Davies, a member of Betfair's founding team, suggesting a sense of déjà vu.
As regulators grapple with this innovative product, the industry watches to see if Europe will eventually move toward a licensed framework or continue its current path of prohibition.
