The Czech Ministry of Finance has designated Polymarket, a decentralized prediction market platform, as an unauthorized online gambling site, requiring internet service providers in the country to block access within 15 days as per national law.
This decision, announced on Tuesday, marks the Czech Republic's alignment with an increasing regulatory trend across Europe that targets prediction markets.
In its official statement, the Ministry of Finance determined that Polymarket's operations fall under illegal gambling activities according to Czech regulations. The ministry cited research predicting that Polymarket could handle around $220 billion in volume by 2025, with a monthly turnover estimated between $10 billion and $11 billion, prompting calls from regulators for more formal oversight.
There are two primary concerns fueling the classification of prediction markets as gambling, as repeatedly highlighted by regulators and academics, including the Czech trade organization, the Institute for Gambling Regulation. The ministry raised alarms about the risks of outcome manipulation and the misuse of non-public information in these markets.
Jan Řehola, the director of the Institute for Gambling Regulation, stated that if a product operates like betting, it must be regulated accordingly. He noted, "They involve betting on real-world events, often without clear accountability to the state, without standard player-protection measures and without the rules that apply to legal gambling." Řehola further asserted, "If something looks like a bet, functions like a bet and allows people to win or lose money depending on the outcome of an uncertain event, we cannot stop treating it as gambling simply because it is called a contract."
Polymarket's decentralized, blockchain-based design complicates these regulatory challenges by emphasizing global access and limiting user identification verification.
Řehola stressed that blocking such platforms is "not about banning innovation"; rather, it aims to ensure that the same regulatory standards apply to all providers of betting services. He emphasized that protecting players, preventing money laundering, and ensuring effective market supervision cannot hinge on an operator's chosen terminology for their products.
This tightening of regulations is not isolated to the Czech Republic. Over the past few years, several countries, including Germany, Belgium, Romania, Switzerland, Poland, Greece, Cyprus, Portugal, Spain, and Ukraine, have imposed restrictions or outright bans on Polymarket.
The Netherlands' Kansspelautoriteit (KSA) notably ordered Polymarket to cease its operations by February 17; however, the platform was late to comply and is now facing sanctions even as it appeals the order. Under Dutch gambling law, both event betting—which includes wagers on political outcomes—and traditional sports betting fall under activities requiring licenses.
In June, nine European regulators launched a joint initiative to combat unlicensed prediction markets. In a collective statement, these European authorities underscored various risks related to consumer protection and market integrity linked to these platforms, especially those functioning without local gambling licenses.
