TLDR
- Polymarket will challenge a Dutch ban and a €420,000 penalty in court in The Hague.
- The Dutch Gambling Authority (Ksa) ordered Polymarket to stop operating in February, saying it lacked a gambling licence.
- Polymarket says it is a financial product and should be overseen by the Dutch Authority for Financial Markets.
- The Ksa rejected Polymarket’s earlier appeal in June, ruling that blockchain and crypto payments do not change the activity’s legal nature.
- Polymarket is meeting regulators across Europe, including ESMA and the UK’s FCA, to seek approval as a financial services firm.
Polymarket is taking the Dutch Gambling Authority to court. The US prediction market platform plans to challenge a ban in the Netherlands and a penalty of €420,000.
The company told Dutch newspaper Financieele Dagblad about the plan. The case will be heard in The Hague.
The Dutch Gambling Authority, known as the Ksa, ordered Polymarket to stop operating in the country in February. The regulator said the platform was running a gambling site without a licence.
The Ksa also blocked access to the US site. It threatened a penalty of €420,000 per week, up to a maximum of €840,000.
Polymarket disagrees with the gambling label. The company says it offers a financial product, not gambling services.
It argues that the Dutch Authority for Financial Markets, or AFM, should oversee its activities instead of the Ksa.
Polymarket Lost an Earlier Appeal
The court case follows a failed appeal. In June, the Ksa rejected an appeal from Adventure One QSS Inc., the company behind Polymarket.
The decision, published on June 23, said the platform’s markets still fall under Dutch gambling law. It also left room for enforcement if the operator did not meet local licensing rules.
In its appeal, Polymarket said it runs as an open-source blockchain protocol. It said users trade directly with each other instead of placing traditional bets.
Dutch regulators did not accept this. They said users still stake value on uncertain future events, and chance plays a key role in the outcome.
The Ksa added that blockchain technology and crypto payments do not change the legal nature of the activity.
The issue also reached Dutch politics in recent weeks. MP Nagip Al Biyati noted that platforms like Polymarket are treated as illegal gambling under current law.
He warned that a full ban without a regulated option could push users to unlicensed foreign platforms. His motion asked the government to study regulating prediction markets as a new subcategory of gambling law.
State Secretary Claudia Van Bruggen did not support the motion in its current form. She pointed to the Ksa’s view that these offers are gambling.
Polymarket Seeks Approval Across Europe
The lawsuit comes as Polymarket tries to win over regulators across Europe. According to the Financial Times, the New York-based company wants to be seen as a financial services group, not a gambling operator.
Polymarket has held meetings in London, Brussels and other EU capitals. It has argued that its business should fall under financial services law instead of local gambling rules.
Most European regulators, including those in France, Germany and Italy, have not allowed prediction markets. Gibraltar has adopted a dedicated framework for them, and Malta has hinted at a similar move.
The company has also started talks with the European Securities and Markets Authority (ESMA) and the European Commission. It hopes to secure a licence to operate legally across Europe.
In June, ESMA chair Verena Ross met two members of Polymarket’s US legal team. A Paris lawyer from A&O Shearman and a Brussels lobbyist from Hanbury Strategy also attended.
The next day, Polymarket executives met Nikhil Rathi, chief executive of the UK’s Financial Conduct Authority (FCA).
The FCA has recently signaled it may review rules on retail access to prediction markets. Still, it says its ban on binary options remains “appropriate given the speculative, gambling-like nature of these contracts and the high risk of consumer harm.”
