The Czech Ministry of Finance has officially categorized Polymarket, a decentralized prediction market platform, as an unauthorized internet game. This decision mandates that internet service providers in the Czech Republic block access to the platform within a 15-day timeframe, following national regulations.
The announcement on Tuesday aligns with a growing European trend aimed at regulating prediction markets. In its statement, the ministry pointed out that Polymarket's operations qualify as unauthorized gambling under Czech law.
Research shared by the ministry suggests that Polymarket may process around $220 billion in volume by 2025, with monthly turnover estimated between $10 billion and $11 billion, raising concerns among regulators for the need for formal oversight.
There are two primary concerns regarding prediction markets being classified as gambling. Regulators and academics, supported by insights from the Institute for Gambling Regulation, have expressed worries about potential outcome manipulation and the misuse of non-public information.
Jan Řehola, director of the Institute for Gambling Regulation, stated that any product functioning as a betting mechanism should be treated as such. He remarked, "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 added, "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."
The decentralized, blockchain-based nature of Polymarket compounds these challenges, offering global access while minimizing user identity verification, which raises additional regulatory concerns.
Řehola clarified that the ministry's action was not aimed at stifling innovation but at ensuring uniform application of regulations for all betting operators. He emphasized, "Player protection, the prevention of money laundering and effective market supervision must not depend on what an operator chooses to call its product."
Across Europe, various countries have taken steps to restrict or block Polymarket. Over the past few years, authorities in Germany, Belgium, Romania, Switzerland, Poland, Greece, Cyprus, Portugal, Spain, and Ukraine have limited access to the platform. Most notably, the Dutch Kansspelautoriteit (KSA) ordered Polymarket to cease operations as of February 17. The platform was late in adhering to this order and is currently facing sanctions, despite having filed an appeal.
Dutch gambling laws classify both "event betting"—which includes wagers on political events and non-sport outcomes—and traditional sports betting as gambling activities subject to licensing. In June, nine European regulators launched a joint initiative aimed at cracking down on unlicensed prediction markets. They issued a joint statement highlighting various consumer protection and market integrity risks tied to these platforms, particularly those operating without local gambling licenses.
