Polymarket to take Dutch ban to court over gambling label

Polymarket says its contracts belong under financial rules

Polymarket’s argument centers on how its prediction contracts work. Users buy and sell positions linked to future events, with winning shares paying out based on the final result.

During its earlier objection, Polymarket told the Ksa that the service does not operate like a conventional bookmaker. Its filing said users trade with each other, the company does not maintain a central prize pool, and prices emerge from market demand instead of odds set by a gambling operator.

Polymarket argued that information, analysis, timing and the ability to exit positions before settlement give traders more control over their results than conventional gambling. It said event contracts therefore resemble derivatives markets where participants trade expectations about future outcomes.

The company went further by arguing that comparable products receive financial-market oversight in the U.S. It told the regulator that a comparable platform could come under AFM supervision in the Netherlands instead of the Ksa.

U.S. regulatory records now provide a concrete example. The Commodity Futures Trading Commission lists QCX LLC, doing business as Polymarket US, as a designated contract market. Separate CFTC product filings classify a number of its event contracts as “Swap (Binary Option)” products. Commodity Futures Trading Commission

The international Polymarket service involved in the Dutch case and the regulated U.S. operation are not governed by the same national regulatory system.

Ksa upheld a €420,000 penalty after its first order

The Ksa initially issued its formal order on Jan. 20 and made it public on Feb. 17. The regulator said Adventure One was providing gambling services to Dutch users without the required license.

The order required Polymarket to stop serving the Dutch market. Failure to comply carried a €420,000 penalty for each week of continued activity, up to a maximum of €840,000. The Ksa left open the possibility of a separate revenue-based fine.

A follow-up inspection on Feb. 18 found, according to the regulator, that the violation had not fully ended. Polymarket disputed that finding and told the Ksa that it had introduced extensive controls blocking Dutch IP addresses on the same day.

The company filed its administrative objection in March. During that process, it contested whether its contracts met the Dutch legal definition of gambling, whether its website targeted the Netherlands and whether the Ksa had jurisdiction over the operation.

The regulator rejected those arguments on June 23. Its final objection decision found that Adventure One had violated the Dutch Gambling Act and upheld both the enforcement order and its publication.

By July, the Ksa confirmed that one €420,000 penalty had become payable and that it had started collection proceedings after the amount remained unpaid. The regulator’s public record does not show that the full €840,000 maximum had been imposed.

The Ksa says peer-to-peer trading can still be gambling

The regulator rejected Polymarket’s argument that the absence of a traditional bookmaker takes the platform outside gambling law.

In its June decision, the Ksa said prediction markets are not a new type of activity simply because blockchain technology is involved. It pointed to betting exchanges and some forms of poker where participants play against each other while the operator performs a facilitating role.

Dutch law, according to the regulator’s decision, covers games where participants compete for prizes and cannot generally exercise predominant influence over the event that determines the winner. The Ksa applied that test to Polymarket’s event contracts and maintained its conclusion that the service falls within gambling regulation.

The regulator separately objected to the platform’s use of cryptocurrency. Its decision said licensed Dutch online gambling operators must use payment methods that can be traced to an identified player and that anonymous crypto payment methods are not allowed within that framework.

Polymarket’s current help center now lists the Netherlands among 39 countries where access is completely restricted. The company says users may not use VPNs or similar tools to bypass those geographical controls.

AFM rules create a separate financial-products question

Polymarket’s argument that the contracts belong under financial regulation does not settle how Dutch securities rules would classify each product.

The AFM states that binary options cannot be marketed, distributed or sold in or from the Netherlands to retail investors. The permanent Dutch restriction has been in place since 2019.

That rule sits alongside the CFTC’s current description of multiple Polymarket US event contracts as binary options. Dutch media reports cited critics arguing that if Polymarket succeeds in having its contracts viewed as financial products, binary-option rules could become relevant to at least some products.

No Dutch court has publicly ruled in the current dispute that Polymarket’s international contracts are binary options under Dutch financial law.

As previously reported, Polymarket has been seeking MiFID treatment for its European contracts while holding discussions with European and U.K. regulators. The company has argued that financial-market supervision is a better fit for event contracts than separate gambling rules in each country.

In related coverage, European securities rules were identified as another possible route for some prediction contracts, with existing binary-option restrictions potentially applying when products meet the relevant financial-instrument definitions.

Polymarket now has to make its case in court

The June Ksa decision expressly allowed Adventure One to appeal to an administrative court. The regulator stated that filing an appeal would not automatically suspend the enforcement decision.

Polymarket has now told Dutch media that it intends to use that route. No published court judgment resolving the appeal had appeared in the official sources reviewed on Oct. 5.

The Netherlands is not the only European market where the company faces a gambling classification. As crypto.news previously reported, France ordered internet providers to block Polymarket after its gambling authority treated the service as unauthorized gambling.

Spain took similar action against Polymarket and Kalshi in May, while the Czech Republic later ordered internet providers to restrict Polymarket.The Dutch case will focus on the Ksa’s June decision and Polymarket’s claim that its event contracts belong within financial-market regulation. The Ksa’s order remains in force while the court challenge proceeds, and Polymarket’s current geographic restrictions continue to list the Netherlands as blocked.