Share
The regulatory wall closing around prediction markets added another brick on Tuesday. Spain’s Ministry of Social Rights, Consumer Affairs and Agenda 2030 published formal sanction proceedings against Polymarket and Kalshi in the country’s Official State Gazette, ordering internet service providers to block access to both platforms at the network level.
LATEST: 🇪🇸 Polymarket and Kalshi are now blocked in Spain after regulators launched disciplinary proceedings, claiming they operated without licenses under Spanish gambling law. pic.twitter.com/LjlpFbUDUz
— CoinMarketCap (@CoinMarketCap) May 26, 2026
Spain is now the fifth country to block one or both platforms in 2026, following Brazil, Indonesia, India, and Portugal.
The disciplinary order was issued by the Directorate General for Gambling Regulation (DGOJ) and was implemented after regulators could not reach the firms at their respective foreign addresses. That procedural detail matters: Spain did not wait for a response from either company before moving to enforcement.
The block is not theoretical either. Spanish internet providers have been ordered to block access, turning a regulatory investigation into a nationwide network-level restriction that users feel the moment they try to log in. Internet Service Providers (ISPs) have seven to 10 days to implement the restriction, with Domain Name System (DNS) redirection forming part of the enforcement mechanism.
The ban will last an estimated three to four months until the probe’s completion. Spanish regulators cited the platforms’ failure to maintain identity verification systems, controls to prevent access by minors and self-excluded users, and supervision standards required under Spanish consumer protection law.
At the heart of every one of these national actions sits the same definitional disagreement. The DGOJ reminded the public that in Spain, in line with other European jurisdictions, prediction markets are considered gambling when bets are placed on uncertain future outcomes, and therefore operating them requires obtaining a specific administrative license.
Kalshi and Polymarket have consistently argued the opposite: that their products are financial derivatives, more akin to regulated futures contracts than casino wagers, and should therefore fall under financial regulators rather than gambling authorities.
That argument has won ground in the United States, where the Commodity Futures Trading Commission has permitted event contracts on its watch. It has found almost no traction in Europe, Asia, or Latin America.
Brazil blocked both platforms in April as part of a sweeping action covering approximately 28 platforms. Indonesia blocked Polymarket on May 25 as illegal online gambling. India issued a formal blocking order on May 21 after reclassifying prediction markets as money games under rules that took effect May 1. Portugal blocked Polymarket in January after a surge in presidential election bets, and Argentina followed with a court-ordered block in March.
The Netherlands escalated enforcement in February, and Belgium made a referral in March, making Spain the third European-level action of 2026. The pace of these actions — roughly one new jurisdiction per month through the first half of the year — suggests a coordinating effect even without formal international coordination. Each block gives political cover for the next.
The timing is acute for both platforms. Kalshi launched Americans for Fair Markets this week specifically to push back against the gambling industry framing in the United States. That lobbying effort is designed for domestic consumption, but the framing it is fighting at home is the exact framing every international regulator is applying abroad.
The Spanish ban highlights the widening divide between regulators embracing federally supervised prediction markets and jurisdictions treating them as unauthorized gambling platforms, with the temporary suspension expected to remain in effect for approximately three to four months while authorities complete the investigation.
For Polymarket and Kalshi, the strategic problem is structural. Their product works best when it aggregates the broadest possible pool of informed traders across geographies. Every national block narrows that pool, degrades price discovery, and hands volume to offshore or decentralized alternatives operating beyond any regulator’s reach. The platforms that benefit most from Spain’s action are precisely the ones Spain cannot touch.
Share
preferred on
