Polymarket has initiated legal action against the Netherlands Gambling Authority (KSA) in The Hague, contending that its event contracts should be classified as financial derivatives instead of gambling products. This lawsuit comes after enforcement actions from the KSA compelled the platform to halt its operations for Dutch users under threat of a fine of €420,000 per week, potentially totaling €840,000.
The KSA's investigation began in 2025 when an inspector accessed the Polymarket platform from the Netherlands and executed minor trades on markets related to Dutch political events. Polymarket maintains that users are trading positions directly against one another, with prices and settlements guided by market activity and automated protocols rather than conventional gambling methods.
The company has pointed out that similar platforms in other parts of the world operate under financial regulation, making its case that event contracts should likewise be governed by these rules. Polymarket has previously advanced this argument during discussions with UK and European financial regulators, including the Financial Conduct Authority (FCA) in the UK and the European Securities and Markets Authority (ESMA).
In June, the KSA dismissed Polymarket's assertions, asserting that the categorization of similar platforms elsewhere does not dictate their standing under Dutch law. Polymarket's appeal will be overseen by the administrative law section of the Hague District Court. Until a ruling is made, KSA's decision remains in effect, meaning Polymarket continues to be restricted from operating within the Netherlands. The case may ultimately be escalated to the Council of State, the highest administrative court in the Netherlands.
