U.S. President Donald Trump has backed the CFTC's exclusive authority over prediction markets as federal and state officials fight over who should regulate the fast-growing sector. According to Trump's Truth Social post late Tuesday, keeping the Commodity Futures Trading Commission in charge is 'critically important' as the U.S. works to set national rules for prediction market contracts. Trump argued that his administration is creating 'rules of the road' and argued that states should not control the sector. The dispute centers on whether prediction markets tied to sports and entertainment should be treated as financial contracts or gambling products, with the CFTC arguing that contracts listed by regulated designated contract markets fall under federal oversight.
Spain's gambling regulator has ordered Polymarket and Kalshi blocked nationwide for up to four months as part of disciplinary proceedings against both platforms for operating without the required administrative authorization. According to reports from The Block, the action was published in Spain's Official State Gazette on May 26 by the Directorate General for Gambling Regulation, part of the Ministry of Social Rights, Consumer Affairs and Agenda 2030. The blocking is precautionary pending the outcome of proceedings expected to last three to four months. The DGOJ issued directives to internet service providers across the country to restrict access to both platforms, with the block expected to take effect within seven to ten days of the formal notice publication.
The regulatory action affects platforms that account for approximately 88% of all prediction market trading volume over the prior 30 days. Kalshi recorded approximately $5.9 billion in trades during that period, while Polymarket reached about $3.8 billion. Combined, this represents around $9.7 billion in monthly volume flowing through just two platforms. Polymarket has particularly deep roots in the crypto ecosystem, settling trades on the Polygon blockchain, and its explosive growth during the 2024 US presidential election cycle turned it into one of crypto's most visible mainstream crossover products. The platforms are currently valued at approximately $15 billion (Polymarket) and $22 billion (Kalshi), with both continuing to expand into sports, geopolitics, and corporate-event contracts.
The timing of Spain's regulatory action carries significant political dimensions, as Polymarket recently opened a market on whether Prime Minister Pedro Sánchez's government would fall early, and Kalshi lists Sánchez at 29% odds to leave office in 2026. Both markets generated significant traffic on Spanish social media, accelerating regulatory attention that might otherwise have moved more slowly. Spain classifies prediction markets as gambling when bets are placed on uncertain future outcomes, requiring operators to hold a specific administrative license to serve users in the country. Spanish authorities were explicit that blockchain infrastructure does not exempt platforms from gambling law, stating that "using crypto or blockchain doesn't change platforms that let users wager on uncertain outcomes from being gambling products." The platforms were cited for a total absence of age verification controls, self-exclusion mechanisms, and identity checks that Spanish gambling law requires from all online operators taking money-staked wagers.
Spain's move makes it the fifth country to block one or both platforms in 2026, following Brazil, Indonesia, India, and Portugal. Brazil blocked both platforms in April as part of a sweeping action covering approximately 28 platforms, while Indonesia blocked Polymarket on May 25 as illegal online gambling and 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. In the United States, the CFTC has actively defended Kalshi's right to operate under federal oversight and has moved to sue states attempting their own restrictions, creating a diverging regulatory map.
