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Spain blocks 2 prediction markets in gambling crackdown

Spain has shut down Polymarket and Kalshi, two platforms that allow users to predict the outcomes of events, because they were operating without the required gambling permits.

Summary

  • Spain’s gambling regulator ordered ISPs to block Polymarket and Kalshi within seven to ten days, with a formal investigation expected to last three to four months.
  • The platforms were cited for lacking required gambling authorisation, age verification systems, and self-exclusion mechanisms under Spanish consumer protection law.
  • Spain is the fifth country to block one or both platforms in 2026, following Brazil, Indonesia, India, and Portugal, as governments classify prediction markets as unlicensed gambling.

Spain’s gambling authority, the Directorate General for Gambling Regulation, has instructed internet providers to block websites Polymarket and Kalshi. This action followed the publication of official warnings by the Ministry of Consumer Affairs in the country’s official journal on May 26th.

The change is predicted to start working in about a week to ten days and should last roughly three to four months while the investigation is completed.

Spain has declared both platforms illegal because they allowed users to bet money on events with uncertain results without having the necessary official permission.

Officials stated that the online gambling site lacked essential safety measures required by Spanish law. These missing features included verifying players’ ages, allowing players to voluntarily ban themselves, and confirming players’ identities.

Why Spain moved now and what triggered the regulatory action

The current situation is also influenced by politics. Polymarket and Kalshi, two prediction markets, recently started allowing people to bet on whether Spain’s Prime Minister Pedro Sánchez will remain in power. These markets, which show a roughly 29% chance of Sánchez leaving office by 2026, quickly gained attention on Spanish social media, prompting regulators to take notice faster than they might have otherwise.

Spanish regulators have made it clear that using blockchain technology doesn’t shield gambling platforms from existing laws. They’ve stated that any platform allowing people to bet on uncertain events is still considered gambling, even if it uses cryptocurrency or blockchain. At least five other countries have now adopted this same legal stance.

In April, Brazil blocked Polymarket along with 26 other platforms. Indonesia followed on May 25th, citing illegal gambling. India also blocked Polymarket on May 21st, after changing its rules on May 1st to categorize prediction markets as a form of gambling.

Portugal first restricted access to Polymarket in January due to a spike in bets on its presidential election, and Argentina soon followed with a court order blocking the platform in March. The Netherlands increased its efforts to enforce the block in February, and Belgium submitted a referral in March. This means Spain is the third European country to take action against Polymarket this year.

As a crypto investor, I’ve been keeping a close eye on upcoming regulations, especially in 2026. Recently, I noticed the House Oversight Committee is asking both Kalshi and Polymarket for information. It seems they’re concerned about potential insider trading and whether these platforms are properly verifying user identities – basically, making sure everything’s on the up and up.

What the global crackdown means for the prediction market industry

Polymarket is worth about $15 billion and Kalshi around $22 billion. Together, these platforms handled billions of dollars in bets around the 2024 US presidential election and are now growing into new areas like sports, world events, and company-related predictions. While the recent restrictions won’t shut these businesses down, they will limit access for users in Europe and developing countries.

In the U.S., the Commodity Futures Trading Commission (CFTC) has been strongly supporting Kalshi’s ability to operate with federal regulation. They’ve even taken legal action against states trying to impose their own rules, which is leading to a patchwork of different regulations across the country.

According to Crypto.news, the biggest regulatory challenge for cryptocurrency-related businesses in 2026 will likely be complying with anti-money laundering (AML) rules. Crypto.news has been following the US Treasury’s efforts to require financial companies operating without standard regulations to follow Bank Secrecy Act rules – a similar reasoning behind Spain’s stance on the matter.

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2026-05-26 23:47