In a rapid development across Europe, Polymarket, a prediction market platform that facilitates betting on political outcomes, has been ordered to stop operations in both Portugal and Hungary within a 48-hour span. This move follows a remarkable influx of wagers on recent elections in these countries, bringing regulatory scrutiny to the fore.
Portugal's Regulatory Intervention
Portuguese gambling authorities, specifically the Serviço de Regulação e Inspeção de Jogos (SRIJ), have issued a directive for Polymarket to halt its activities in Portugal. This decision was prompted by the platform overseeing bets related to the January 18 presidential election, which amassed a total trading volume exceeding 103 million euros, equivalent to approximately 120 million U.S. dollars.
Portugal's current legal framework for online gambling, established in 2015, categorically prohibits betting on political events. The legislation sanctions betting activities only in domains such as sports betting, casino gaming, and horse racing. Since Polymarket offers wagering bets on political contests without holding a national license, its operations are deemed unauthorized.
The Portuguese regulator emphasized this by stating that national law explicitly forbids all betting pursuits tied to political events, whether domestic or international. While Polymarket's platform remains accessible for the time being, authorities have signaled the potential to instruct internet service providers within Portugal to completely block access should the company fail to comply with the cease-and-desist order.
Notably, Polymarket is not the only prediction market visible to Portuguese users; other competitors like Kalshi, Myriad, and Limitless continue to operate without facing similar immediate restrictions.
Hungary Implements Immediate Ban
In a related incident, Hungarian regulators, specifically the authority known as SZTEH, imposed a temporary ban on Polymarket's services on January 19. This action was attributed to suspicions regarding the organization of illegal gambling activities hosted by the platform.
The Hungarian ban affects users attempting to reach Polymarket’s site using IP addresses registered in Hungary. However, it does not extend to users accessing the site via virtual private networks, which still allow connectivity. While the ban's status remains provisional pending the final administrative verdict, the near-simultaneous imposition alongside Portugal's ban suggests coordinated regulatory vigilance within the European landscape.
A key factor contributing to Hungarian authorities' responsiveness was the notable volume of bets on the nation's political leadership. Polymarket reportedly hosted wagers amounting to 2.5 million U.S. dollars on the identity of Hungary’s next prime minister. As of December, markets indicated a 56% probability favoring Péter Magyar over Viktor Orbán, who held a 43% chance. This level of political betting activity evidently attracted swift governmental attention to potential legal violations.
Growing Global Restrictions
Polymarket, established in 2020, is increasingly confronting regulatory challenges worldwide. Presently, it faces operational limitations in over 30 nations, including but not limited to Singapore, Russia, Belgium, Italy, and Ukraine. The nature and severity of these restrictions differ widely. For example, Belgium has placed a complete ban on the platform, blocking access entirely. Conversely, France adopts a partial approach by permitting users only to view markets without allowing active betting participation.
The platform surged into the spotlight during the 2024 U.S. presidential election cycle, where it facilitated hundreds of millions of dollars in bets on the election outcome. This visibility has intensified global regulatory scrutiny and fostered a wave of enforcement actions against prediction markets engaging in political event wagering.
The bans enacted in Portugal and Hungary illustrate the swift responses of national regulators when confronted with rising volumes of political betting activity. These developments highlight an evolving regulatory environment aimed at curbing unauthorized gambling platforms that operate without appropriate licenses or contravene specific national laws.