Jdigital, Spain’s online gambling trade association, states that its membership fully supports the decision to ‘temporarily block’ the status of prediction markets from gaining licences.
Yesterday, the gazette of the Dirección General de Ordenación del Juego (DGOJ), announced that disciplinary review had been initiated against the prediction market platforms of Polymarket and Kalshi.
Spain’s gambling authority has given Kalshi and Polymarket a window of three and four months to apply for a Spanish online gambling licence, with access to both platforms suspended until the procedure is approved.
It is unknown whether Kalshi and Polymarket will cooperate with the DGOJ request, in which it detailed that the regulator needed to verify what prediction markets offer and their distinction from gambling mechanics offered by standard licences.
At the heart of the dispute lies a question increasingly confronting regulators worldwide: what exactly are prediction markets?
The DGOJ maintains that “when consumers stake money on uncertain future events — whether elections, sporting outcomes or economic developments the activity falls squarely within the country’s gambling framework.”
The fact that operators market these products as event contracts or trading instruments does not alter their legal status, under Spain’s Gambling Act of 2011.
Jdigital welcomed the regulator’s intervention, describing it as a necessary step in protecting both consumers and Spain’s regulated gambling market.
The association argued that platforms operating without licences undermine a system in which authorised operators face extensive obligations covering identity verification, anti-money laundering controls, responsible gambling measures and protections for minors and vulnerable consumers.
“Players who access operators without a licence remain outside the policies and guarantees provided for within the regulated market,” the trade body stated.
It further warned that consumers using unlicensed prediction market platforms have no access to the safeguards required of regulated operators, adding that “any citizen who accesses a prediction market platform without a licence will not benefit from any of these guarantees”.
The dispute also exposes growing frustrations among Europe’s licensed gambling sector. Jdigital has repeatedly argued that regulated operators face mounting compliance costs, advertising restrictions and consumer protection requirements, while offshore and unlicensed businesses are able to target customers with comparatively little oversight.
According to an EY referenced by Jdigital, “one in four Spanish gamblers has used an unlicensed platform”, a figure used as evidence that “Spanish authorities should intensify enforcement efforts against illegal operators.”
Yet the wider battle is about more than Spain…Across Europe, regulators are increasingly scrutinising prediction market businesses, with France, Belgium, Germany, Portugal, Poland and the Netherlands all taking action against operators seeking to offer event-based contracts without local authorisation.
In the backdrop, the British overseas territory of Gibraltar has already established a licensing route for prediction market activity through its gambling framework. Furthermore, last week Malta came out as a jurisdiction that will examine how prediction market platforms should be accommodated under future regulatory structures.
At home in the US, prediction markets are regulated by the Commodity Futures Trading Commission (CFTC) as derivative products rather than gambling services. The sector has also gained influential political backing.
This week, US President Donald Trump described prediction market platforms as important to the future of the American economy, adding another layer of momentum to an industry that has attracted billions of dollars in investment.
For European regulators, however, the issue remains one of consumer protection and market integrity rather than financial innovation.
Spain’s decision, therefore, represents more than a national enforcement action. It is the latest signal that European authorities are unwilling to accept prediction markets operating outside established gambling frameworks.
For now, another major European jurisdiction has closed its doors to Polymarket and Kalshi. But the fight is unlikely to end there.
For these high-stake ventures, the next move will almost certainly be to lobby Brussels and national governments to recognise event contracts as financial derivatives rather than gambling products.
A legal distinction that could ultimately determine whether prediction markets become a mainstream financial product in Europe or remain locked out of the continent’s regulated markets.
