Spain Blocks Kalshi and Polymarket for Operating Without a Gambling Licence

Spain’s gambling regulator has ordered the precautionary blocking of Kalshi and Polymarket and opened formal disciplinary proceedings against both platforms for operating in the country without a licence.

The Directorate General for Gambling Regulation (DGOJ), operating under the Ministry of Social Rights, Consumer Affairs and Agenda 2030, published the sanctioning notices in Spain’s Official State Gazette (Boletín Oficial del Estado) on 26 May. Both New York-based platforms are accused of offering services in Spain without the mandatory administrative authorisation required under the country’s gambling regulations. The precautionary block will remain in force until the proceedings conclude, a process the ministry estimates will take three to four months.

Regulator Cites Consumer Protection Failures

The DGOJ’s statement went beyond the licensing violation, identifying specific consumer-protection deficiencies as grounds for immediate action. These include the absence of effective identity-verification systems, no controls restricting access by minors, and no mechanisms to block self-excluded or gambling-prohibited individuals from accessing the services.

The government confirmed that attempts to notify both companies at known foreign addresses before the formal proceedings were initiated were unsuccessful.

“Spain, in line with other European jurisdictions, considers prediction markets to be gambling when bets are placed on uncertain future outcomes. Therefore, operating them in Spain requires a specific administrative licence. Furthermore, the DGOJ warns that unauthorised operators lack the technical and regulatory safeguards required in Spain, including identity verification systems, mechanisms to control access by minors and individuals who have self-excluded or are prohibited from gambling and the necessary supervisory standards to protect users.”

Three Outcomes Once Proceedings Close

At the conclusion of the disciplinary process, both platforms face three available paths: seek proper licensing in Spain under the country’s existing regulatory framework, mount a legal challenge against their classification as gambling products, or adjust their service offerings to comply with local rules and exit the Spanish market.

The DGOJ lists 54 companies currently holding sports betting licences in Spain. Major international operators including Entain, Evoke, bet365, Betsson, Flutter Entertainment and Betway are all licensed and active in the market. Flutter’s Betfair Exchange is the closest structural equivalent to a prediction market currently operating in Spain under full regulatory approval.

CIRSA, which runs the Sportium brand, had already positioned itself ahead of this action. CEO Antonio Hostench stated earlier this year that his company was “200% protected” against US-based prediction market platforms, citing Spain’s regulatory framework as a structural barrier to unlicensed entry. CIRSA has also signalled plans to launch its own prediction markets product within the licensed framework.

A Widening European Enforcement Picture

Spain joins a growing list of European regulators taking formal action against prediction markets. The Netherlands Gambling Authority (KSA) issued a cease-and-desist order against Polymarket earlier in 2026 for operating in the country without a licence.

The core regulatory tension across Europe mirrors the one playing out across US states. Kalshi and Polymarket are federally regulated in the United States by the Commodity Futures Trading Commission, which classifies their products as financial instruments — specifically, event contracts traded on a designated contract market. That classification carries no weight under European gambling frameworks, where the economic structure of the product — placing stakes on uncertain future outcomes — determines how it is regulated, not how the operator chooses to describe it.

The Spanish action is among the most formal enforcement steps taken against either platform in Europe. Publication in the official state gazette and an explicit three-to-four month resolution timeline gives the proceedings a procedural weight that informal cease-and-desist communications lack. Brazil took a structurally similar approach in April, blocking 28 prediction market platforms after the National Monetary Council classified event-based contracts as illegal under existing financial market law.

Capital Keeps Flowing Despite Regulatory Headwinds

The regulatory pressure has not slowed investment in either platform. Kalshi raised more than $1 billion in a Series F round led by Coatue Management, pushing its valuation to $22 billion — double the $11 billion it commanded in December 2025. Polymarket is separately reported to be in talks at a $15 billion valuation and recently relaunched services in the US market.

In the US, Kalshi filed a preemptive federal lawsuit against Rhode Island on 22 May, the same day the state’s attorney general sued both Kalshi and Polymarket for unlicensed sports betting — the latest front in a multi-state legal war that legal analysts have described as heading toward the US Supreme Court.

The outcome of Spain’s proceedings will be closely watched. A formal ruling that prediction markets constitute gambling under Spanish law — and the licensing regime or market exclusion that follows — is likely to inform the approach of European regulators that have not yet moved to formal enforcement.

Source: DGOJ / Ministry of Social Rights, Consumer Affairs and Agenda 2030