The regulatory authorities in Hungary and Portugal have recently enforced rigorous Polymarket access restrictions after identifying significant irregularities in their local operations. According to official reports released by European supervisors this week, the decentralized prediction platform is facing massive blocks for operating without the mandatory financial licenses.
This regulatory offensive, spearheaded by gambling oversight bodies, aims to mitigate risks associated with unauthorized political betting within the European territory while ensuring strict compliance with national statutes.
In the Hungarian scenario, the Supervisory Authority for Regulated Activities (SZTFH) decided to temporarily disable the platform’s domains, labeling the activity as a forbidden organization of gambling. Local users have reported immediate IP address blocks, which now display official government warnings regarding the illegality of the service provided.
Furthermore, in Portugal, the Gaming Regulation and Inspection Service (SRIJ) issued a formal cease-and-desist order, claiming that the platform lacks the necessary authorization to manage electoral forecasts and financial wagers.
This specific measure on Portuguese soil emerged after officials identified that approximately four million euros were wagered on local presidential races. Since political betting is strictly prohibited nationwide, the regulator suspects that there might be severe cases of insider trading involved in these transactions.
While authorities continue to evaluate the impact of these massive volumes, the platform remains under intense scrutiny due to its controversial business model that blurs the lines between finance and traditional gambling.
The dilemma between financial markets and the gambling sector
Despite supporters arguing that this system reflects the efficiency of modern financial markets, the current regulatory reality indicates a much more restrictive path. Currently, the platform is geoblocked in more than thirty nations, which demonstrates a growing global distrust toward unregulated decentralized prediction markets. The rise of cryptocurrencies has undoubtedly facilitated these types of transactions, but it has also triggered alarms for supervisors in France, Switzerland, and Singapore, who have already implemented similar restrictive measures to protect their domestic markets.
For most regulators, the core issue lies in the lack of transparency regarding the entities operating behind these high-volume transactions. Recently, a suspicious market movement regarding the removal of a Latin American leader generated profits of four hundred thousand dollars just before a military operation. Thus, the concern for market integrity has reached United States lawmakers, who are already proposing new legislation to limit these speculative practices among government officials and high-ranking public employees.
Can the prediction sector survive the mounting pressure from global regulators?
It is quite paradoxical that, amidst this legal siege, the trading volume in these markets reached a historical record of seven hundred million dollars this January. However, the competition is rapidly gaining ground, as regulated platforms like Kalshi are successfully capturing most of the institutional capital flow. Therefore, the survival of decentralized models will depend entirely on their ability to adapt to the legal frameworks of each European jurisdiction without compromising their core technological principles.
As the level of scrutiny increases, the future of the industry seems to lean toward higher supervision and strict compliance with anti-money laundering standards. It is highly expected that more European Union countries will follow the example set by Hungary to protect consumers from platforms operating without a valid license. Only time will tell if decentralization can truly coexist with a regulatory environment that prioritizes state control and consumer protection over open financial innovation.
