Romanian Regulator Blacklists Polymarket as ‘Gambling That Must Be Licensed’

In brief

Romania’s gambling regulator blacklisted Polymarket in the country.
The regulator said it meets the definition of counterparty betting as users put up a stake, and a future event determines the outcome.
Of particular concern was expanding volumes on Romanian elections, which have stretched into the millions of dollars.

Leading prediction market Polymarket was placed on the blacklist of unauthorized websites by Romania’s National Office for Gambling (ONJN), the regulator announced on Thursday.

The firm was banned due to carrying out gambling activities without a license in Romania.

“The decision to include Polymarket on the blacklist is not related to technology, but to the law,” ONJN President Vlad-Cristian Soare said in a statement. “Regardless of whether you bet in lei or crypto, if you bet money on a future result, under the conditions of a counterpart bet, we are talking about gambling that must be licensed.”

“ONJN will not allow the transformation of blockchain into a screen for illegal betting,” he added.

According to the regulator, though Polymarket is often characterized as an “event trading platform,” it meets the definition of “counterparty betting,” as users put up a stake against other users and a future event determines the outcome.

“Accepting the idea that a ‘counterparty betting’ system can be called ‘trading’ would create a dangerous precedent, whereby any operator could ‘reinterpret’ the counterparty betting activity as a stock exchange activity – circumventing strict gambling or capital markets regulations,” the regulator wrote.

Of particular concern for the regulator was the increased prediction market activity during Romanian local elections. For example, a market on Polymarket which asks users to predict the mayor of capital city Bucharest has garnered more than $16 million in volume.

Earlier this year, one electoral market generated more than $370 million in total volume.

Decrypt reached out to Polymarket for comment but did not receive an immediate response.

Polymarket has gathered scrutiny in other parts of the world for similar reasons. Last year, France’s National Gaming Authority planned to ban the prediction platform after investigating its compliance with French gambling legislation.

The platform had been effectively banned in the United States following a 2022 fine from the CFTC. But in July, it acquired derivatives exchange QCX, which had received a no-action letter from the regulator, essentially allowing the market to resume activities in the United States.

Polymarket recently received a $2 billion investment from the New York Stock Exchange owner, Intercontinental Exchange. The raise valued the firm around $9 billion.

In a Myriad prediction market, nearly four in five respondents did not expect Polymarket to officially announce a token this year, though an executive recently confirmed plans for one. (Disclaimer: Myriad is a unit of Dastan, the parent company of an editorially independent Decrypt.)