Spain's Consumer Rights Ministry has officially launched disciplinary proceedings against prediction market platforms Polymarket and Kalshi for operating without proper gambling licenses, as confirmed by the official state gazette on May 26. According to the ministry's statement, its gambling watchdog Dirección General de Ordenación del Juego (DGOJ) opened a formal probe into the U.S.-based companies for allegedly breaching local rules by lacking mandatory administrative authorization. The blocking measures took effect immediately with the ministry stating it had attempted to notify both companies before blocking them, but these efforts proved unsuccessful. The sanction process itself is expected to run 3 to 4 months before a final resolution, with the ministry emphasizing that "in Spain, in line with other European jurisdictions, prediction markets are considered gambling when bets are placed on uncertain future outcomes."
The blocking measures affect platforms that currently dominate prediction markets' trading activity. As reported by DeFiLlama data, Kalshi recorded roughly $5.9 billion in trading volume over the past 30 days, while Polymarket processed about $3.8 billion during the same period. Combined, the two platforms represent nearly 88% of the roughly $11 billion in trading volume among the sector's top markets during this period. The ministry stated that unauthorized operators lack the required technical and regulatory safeguards, including identity verification systems, access control mechanisms for minors, and protection standards for users who have self-excluded or are banned from gambling. The blocking comes amid growing scrutiny, particularly after some users placed substantial bets before the US-Israeli war in Iran and Washington's military action in Venezuela.
The timing adds political dimension to the regulatory action, as Polymarket recently opened a market on the possible early end of Prime Minister Pedro Sánchez's term, while Kalshi currently offers bets on which national leader will leave office in 2026, with Sánchez listed at 29% probability. Both markets generated significant attention on Spanish social media, attracting regulatory scrutiny that might otherwise have moved more slowly. The ministry determined that both platforms lack essential consumer protection safeguards entirely, including age verification systems, access controls for minors, self-exclusion mechanisms for problem gamblers, and ongoing user monitoring required of licensed gambling operators in Spain. The ministry's statement specifically noted that "operators would have to comply with a series of safeguards, such as identity verification systems and mechanisms to bar access by children as well as people who have self-excluded or who are banned from gambling."
Spain's action increases global regulatory scrutiny of the prediction markets industry, joining a widening European crackdown on the platforms. According to reports, France's national gaming authority blocked Polymarket in late 2024, ruling that its operation amounted to unlicensed gambling, while Belgium, Poland, and Italy issued similar bans in the same year. The Dutch gambling regulator KSA threatened Polymarket with fines of €420,000 per week if it continued serving Dutch users without a license, representing the largest single enforcement threat from a European regulator. Other countries including Taiwan, Thailand, China, and Japan have restricted the platform, while Ukraine blocked it with no legal way for it to return. Polymarket's list of blocked countries also includes Belgium, Australia, France, the U.K., and Germany. The latest enforcement action represents the third European-level enforcement action of 2026, following a Netherlands escalation in February and a Belgian referral in March.
The Spanish action comes against the backdrop of a coordinated international tightening, with India's electronics and IT ministry issuing a formal blocking order against Polymarket on May 21, instructing internet service providers to cut access at the network level. India formally reclassified prediction markets as 'money games' under online gaming rules that took effect on May 1. Brazil and Indonesia have also issued bans in recent weeks, with Indonesia blocking Polymarket last week after bets on President Prabowo's resignation spread on local social media. The Spanish suspension is the third European-level enforcement action of 2026, following a Netherlands escalation in February and a Belgian referral in March, with the Spanish probe scheduled to conclude in late summer. Meanwhile, Minnesota became the first US state to sign off on a law banning prediction market sites from operating in its jurisdiction this month, with the Trump administration responding by suing the state, accusing it of undermining "the federal regulatory regime" in an effort to block the law from taking effect in August.
