Spain has ordered a temporary block on prediction market platforms Kalshi and Polymarket while regulators investigate whether the companies are offering gambling services without the required licenses.
The suspension, announced by Spain’s gambling regulator, is expected to remain in effect throughout the investigation and could last between three and four months, covering the entire FIFA World Cup period.
Regulator Examines Licensing Compliance
The investigation is being led by Directorate General for the Regulation of Gambling, which will assess whether Kalshi and Polymarket have violated Spanish gambling laws by operating without authorization.
Spanish authorities classify prediction markets as gambling services because users place wagers on uncertain future outcomes. As a result, operators offering such products must obtain the appropriate gambling licenses before providing services in the country.
While prediction market companies often argue that their products function as financial instruments rather than traditional betting services, regulators across much of Europe have generally taken a different view.
Growing Scrutiny of Prediction Markets
Prediction markets have experienced rapid growth in recent years, particularly in the United States, where users trade contracts linked to the outcomes of sports events, elections, economic developments, and other real-world occurrences.
Unlike traditional bookmakers, platforms such as Kalshi and Polymarket facilitate trading between participants, with contract prices reflecting perceived probabilities of future events.
Despite this structure, Spanish regulators maintain that the activity falls within the scope of gambling legislation because participants risk money on uncertain outcomes.
Consumer Protection Concerns
The DGOJ stated that unlicensed operators do not comply with Spain’s regulatory and technical requirements, which are designed to protect consumers.
These standards include identity verification procedures, safeguards preventing access by minors and self-excluded individuals, and responsible gambling measures intended to reduce potential harm.
Authorities argue that operators must meet these obligations before offering services to Spanish consumers.
Broader Regulatory Reforms Underway
The action against Kalshi and Polymarket comes as Spain reviews broader changes to its gambling regulatory framework.
Last week, the government launched a public consultation on proposed amendments to the Gambling Regulation Act. The reforms aim to strengthen consumer protections, improve prevention measures, and provide regulators with additional tools to combat illegal gambling activity.
The proposals also address gambling advertising practices, including the use of celebrities and influencers in promotional campaigns, customer acquisition incentives, and restrictions on search engine advertising. Under the proposed changes, gambling-related advertisements would only appear when users conduct searches directly related to betting services.
The consultation process will remain open until 22 June, while the investigation into Kalshi and Polymarket continues.
