Spain Suspends Polymarket and Kalshi for Operating Without Gambling Licences
Spain's Temporary Ban on Prediction Markets
MADRID, May 26 (Reuters) - Spain's Consumer Rights Ministry temporarily banned so-called prediction markets Polymarket and Kalshi for operating in the country without a gambling licence, the official state gazette showed on Tuesday.
Investigation into Unlicensed Operations
• In a statement, the ministry said its gambling watchdog had opened a probe into the U.S.-based companies for allegedly breaching local rules by lacking mandatory administrative authorisation.
Duration and Scope of the Ban
• The ban will last an estimated three or four months until the probe's completion, it said.
Understanding Prediction Markets
• Prediction market users buy and sell stakes on the outcome of future events, with prices reflecting the probability of one outcome or another occurring.
Legal Classification in Spain
• Spain - like other European jurisdictions - considers prediction markets a form of gambling when bets are placed on uncertain outcomes.
Regulatory Concerns and User Protection
Technical and Regulatory Safeguards
• The ministry said unauthorised operators lack the required technical and regulatory safeguards like identity verification systems, access control mechanisms for minors and for people who have self-excluded or are banned from gambling, as well as the standards needed to protect users.
Risks for Users
• Once a niche corner of the internet, prediction markets have mushroomed into a multi-billion-dollar industry after gaining a foothold in U.S. politics in 2024.
(Reporting by David Latona; Editing by Thomas Derpinghaus)
