Polymarket has initiated legal proceedings against the Netherlands Gambling Authority (KSA) in The Hague. The prediction market company contends that its event contracts should fall under the category of financial derivatives rather than be classified as gambling products.
This lawsuit follows enforcement actions taken by the KSA regarding Polymarket's operations available to users in the Netherlands. The KSA mandated that the platform cease its services to Dutch users or face penalties amounting to €420,000 per week, potentially totaling up to €840,000.
The regulator's investigation began in 2025 when an inspector was able to access Polymarket from within the Netherlands and executed minor trades concerning Dutch political events. Polymarket maintains that its users trade against one another, with pricing and settlements dictated by market activity and automated protocols—distinct from conventional gambling mechanisms.
The firm has cited similar platforms in various jurisdictions, arguing that these event contracts should align with financial regulations. They have presented this classification argument to the UK Financial Conduct Authority and the European Securities and Markets Authority (ESMA) as well.
In June, the KSA rejected Polymarket’s claims, asserting that the classification of similar entities in other regions does not influence their categorization under Dutch law. The current appeal will be addressed by the administrative law division of the Hague District Court. As it stands, the KSA's ruling remains intact until a different decision is rendered by the court, and Polymarket continues to have the Netherlands listed among its restricted jurisdictions. Should the case proceed, it may ultimately be brought before the Council of State, the highest administrative court in the Netherlands.
