The Czech Ministry of Finance has officially categorized the decentralized prediction market platform Polymarket as an unauthorized internet game, requiring internet service providers in the country to block access to the site within 15 days in compliance with national regulations.
This decision, announced on Tuesday, reflects the Czech Republic's agreement with a growing trend across Europe aimed at regulating prediction markets.
In its statement, the ministry highlighted that Polymarket’s operations are classified as unauthorized gambling under Czech law. It referenced studies suggesting Polymarket could process around $220 billion in volume by 2025, predicting monthly transactions between $10 billion and $11 billion. The anticipated scale of activity has raised concerns among regulators regarding the necessity for formal oversight.
Two primary issues have been identified by both regulators and academics, with input from the Czech trade organization, the Institute for Gambling Regulation. These revolve around the risk of outcome manipulation and the potential misuse of confidential information.
Jan Řehola, director of the Institute for Gambling Regulation, stated that any product that operates like a betting mechanism should be subjected to the same regulations as traditional gambling. He said, “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 continued, emphasizing, “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 challenges surrounding Polymarket are compounded by its decentralized, blockchain-based structure, which facilitates global access with minimal user identity verification. Řehola asserted that the initiative to block such platforms is not intended to stifle innovation but to ensure uniform regulatory compliance for all betting operators. “Player protection, the prevention of money laundering, and effective market supervision must not depend on what an operator chooses to call its product,” he concluded.
In recent years, several European regulators including those from Germany, Belgium, Romania, Switzerland, Poland, Greece, Cyprus, Portugal, Spain, and Ukraine have either restricted or blocked Polish access to Polymarket. Notably, the Netherlands’ Kansspelautoriteit (KSA) mandated the platform to stop operations by February 17. Polymarket did not meet this deadline and faced sanctions from the Dutch regulator despite submitting an appeal.
Under Dutch gambling law, both “event betting,” which includes wagering on political outcomes and other non-sport events, as well as traditional sports betting are classified as gambling activities that require licensing.
In June, nine European regulators banded together in a joint effort to target unlicensed prediction markets. They expressed concerns about various consumer protection and market integrity risks posed by these platforms, especially those operating without local gambling licenses.
