Polymarket, Kalshi Hit New Roadblock In Spain: Regulator Opens Probe Over Law Breaches

Polymarket and Kalshi have been hit with mounting regulatory scrutiny, and Spain is now the latest jurisdiction to step in. After challenges ranging from security concerns to government investigations, Spanish regulators have begun a formal process against both prediction market operators and ordered their sites blocked nationwide.

Sanctions Against Polymarket And Kalshi

Spain’s Directorate General for the Regulation of Gambling launched a sanctioning process targeting Polymarket and Kalshi. Along with opening the procedure, the authority ordered the nationwide blocking of both platforms’ websites across Spanish territory as a precautionary step, pending the outcome of the case.

Spain’s regulator framed the action around allegations that the companies are operating without the proper authorization. In an official release connected to the matter, the agency said it initiated the sanctioning procedure over what it described as breaches of gambling rules. 

The accusation centers on the claim that Polymarket and Kalshi are present in Spain without the mandatory administrative license. According to the regulator, Spain—similar to other European jurisdictions—treats prediction markets as games of chance where users place wagers on uncertain future outcomes. 

Under that interpretation, platforms operating in Spanish territory must obtain a specific administrative license. The authority argued that operators without authorization do not provide the technical and regulatory guarantees Spain requires for gambling activities. 

Those safeguards include systems for identity verification, mechanisms designed to prevent access by minors, controls related to self-excluded or banned individuals, and supervisory standards intended to protect users.

The regulator also indicated that the procedure against both Polymarket and Kalshi is expected to run for roughly three to four months before a final decision is issued.

US Investigation, Indonesia Ban

The Spanish action follows pressure on Polymarket and Kalshi elsewhere, making it an unusually tough month for the sector. Earlier developments included Polymarket dealing with an exploit and also being banned in Indonesia on Monday after increased local attention surrounding a bet related to the President’s term. 

Indonesia’s Ministry of Communication and Digital Affairs said the restriction was intended to protect the public, with emphasis on younger users and people participating in the digital space. 

In the US, Representative James Comer announced a formal investigation into the duo of prediction market platforms. In that inquiry, Comer requested that the CEOs of both companies explain how their platforms detect and prevent insider trading. 

The probe was reportedly prompted by a series of suspicious trades linked to classified US military operations and geopolitical events. With Spain now moving to sanction and block access, the regulatory list continues to expand. 

Featured image created with OpenArt; chart from TradingView.com