Dutch Gambling Authority Rejects Polymarket's Appeal, Upholds Sanction

The Netherlands Gambling Authority (KSA) has dismissed an appeal by Polymarket operator Adventure One QSS Inc., confirming that the prediction market platform offered illegal gambling services to Dutch users. In a ruling published on 23 June, the regulator upheld its January sanction, which determined that Polymarket allowed users to wager on future events for prizes, meeting the legal definition of gambling under Dutch law.

Adventure One had argued that its platform was merely an interface to the open-source Polygon blockchain protocol, where users trade peer-to-peer positions via crypto wallets and outcomes are verified by an external oracle. The company also claimed that some of its contracts fall under financial regulations, a point recently supported by the EU's financial regulator ESMA. However, the KSA rejected these defenses, stating that the element of chance, combined with the platform's promotional language using the word "betting," clearly indicated a gambling service.

The regulator emphasized that blockchain technology, crypto wallets, or decentralized protocols do not exempt operators from Dutch gambling laws. It also noted that Polymarket's registration was accessible from Dutch IP addresses, featured Dutch-language AI customer support, and offered markets on local political and sporting events—factors that demonstrated the platform was actively targeting Dutch users. Under Dutch law, both sports betting and event betting (including on political outcomes) require a local license, which Polymarket lacked.

Polymarket's parent company was given a four-week grace period starting in January to cease Dutch operations, but it missed the 17 February deadline, implementing IP-blocking only the next day. Consequently, financial penalties began accruing automatically. The operator's legal challenges—claiming the sanction was disproportionate, legally uncertain, or procedurally flawed—were all dismissed by the KSA. The regulator also defended publishing the remedial order under the Dutch Open Government Act, arguing it was justified for consumer protection and deterrence, rejecting claims of unfair "naming and shaming."

This case highlights a growing regulatory divide across Europe regarding decentralized prediction markets. Last month, nine European regulators launched a joint initiative to crack down on unlicensed prediction platforms, citing consumer protection and market integrity risks. The KSA's firm stance signals that operators relying on blockchain interfaces will still face scrutiny under traditional gambling frameworks.