Key Takeaways
- Polymarket is challenging a Dutch ban and €420,000 penalty in court.
- Polymarket argues its event contracts are financial products, not gambling.
- Dutch regulators say betting on uncertain outcomes qualifies as illegal gambling.
- The ruling could influence how prediction markets are regulated across Europe.
Polymarket is taking its fight with Dutch regulators to court, challenging a ban that could help determine whether prediction markets are treated as gambling platforms or financial products in the Netherlands.
The US prediction market argues that its event contracts should fall under the Dutch Authority for the Financial Markets (AFM), rather than the gambling regulator Kansspelautoriteit (Ksa).
The Ksa takes the opposite view, saying Polymarket offered illegal games of chance without a Dutch license.
The dispute follows a €420,000 enforcement penalty against Adventure One QSS Inc., the operator of Polymarket.
Polymarket Challenges €420K Dutch Penalty
The Ksa ordered Polymarket to stop serving the Dutch market earlier this year and warned of penalties of €420,000 per week, capped at €840,000.
Polymarket subsequently restricted Dutch users, but regulators determined it had complied too late. The Ksa said in July that Adventure One had violated the enforcement order, triggering a €420,000 penalty that the regulator moved to collect. Polymarket had already challenged the decision through the administrative objection process, but the KSA rejected its objection in June.
The company is now escalating the dispute to court.
The case gained additional attention due to Polymarket’s role in the 2025 Dutch parliamentary election. More than $30 million was wagered on election-related markets, according to NL Times.
Is Polymarket Gambling or a Financial Product?
The central argument goes beyond the €420,000 penalty.
Polymarket allows users to trade contracts whose value depends on whether an event occurs. The company argues that this structure resembles futures and should therefore be supervised as a financial product.
The Ksa sees the same mechanism differently: users put money at risk on uncertain outcomes, making the contracts gambling under Dutch law.
Even Polymarket’s preferred classification could create another regulatory problem.
Critics argue that its yes-or-no contracts resemble binary options, where traders receive a predetermined payout if an outcome occurs or lose their stake if it does not. Binary options face strict restrictions for retail investors across Europe.
Dutch gambling lawyer Micha Schimmel told Financieele Dagblad that Polymarket may face a difficult case, citing earlier Dutch jurisprudence indicating that a product can have financial characteristics yet still qualify as gambling.
Prediction Markets Face a Wider Regulatory Fight
The Dutch case is part of a broader battle over how prediction markets fit into existing regulatory systems.
France and Germany have also restricted Polymarket, while regulators and courts in the US continue to confront similar questions regarding event contracts, particularly those linked to sports.
Polymarket recently introduced voluntary deposit limits and lockouts aimed at curbing compulsive trading, amid increasing legal scrutiny of prediction markets in the US.
The Dutch ruling could therefore carry implications beyond a single fine.
If Polymarket convinces the court that its contracts fall under financial-market regulation, it could strengthen the industry’s argument that prediction markets are closer to derivatives exchanges than sportsbooks.
If the Ksa prevails, however, the decision would reinforce a growing European position: changing the technology and calling wagers “contracts” does not necessarily stop a prediction market from being gambling.
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Dr. Guneet Kaur is a senior editor at CCN.com and a Science Fellow at Exponential Science. She is a fintech and blockchain expert with extensive experience in digital finance education, blockchain ecosystems, and cryptocurrency markets. She has worked with global media such as Cointelegraph, as well as education and blockchain platforms, to design and lead strategic content and learning initiatives. As an educator and assessor for top-tier executive programs, she bridges real-world fintech trends with academic insight.
Dr. Kaur is also a published researcher and peer reviewer across fintech and data science journals, including Financial Innovation Journal and International Journal of Big Data Intelligence and Applications. Her work spans data-driven analysis, Web3 innovation, and technical content development. With a strong foundation in both industry and academia, she translates complex financial technologies into practical applications, empowering learners, professionals, and institutions across the rapidly evolving digital finance landscape.
