The Kansspelautoriteit (KSA), the Dutch gambling authority, has denied an appeal from Adventure One QSS Inc., the operator of Polymarket, regarding a sanction related to illegal gambling services offered to users in the Netherlands.
In January, the KSA determined that Polymarket’s platform allowed Dutch users to compete for prizes or rewards based on bets concerning future events, thus classifying it under the legal definition of gambling in the Netherlands. According to local laws, both event betting—which includes bets on elections and various non-sport outcomes—and regular sports betting require a gambling license.
On June 23, the KSA confirmed its initial ruling from January, threatening Polymarket’s parent company with financial penalties unless it ceased operations in the Netherlands. Initially, Adventure One was granted a four-week grace period to comply, but it failed to meet the February 17 deadline. Instead, it implemented IP-blocking measures the next day, leading to automatic penalties.
Adventure One filed an appeal in March, contesting the KSA's definition of its offering as gambling and requesting reimbursement for legal expenses. The company argued that it merely provided an interface for a blockchain protocol (Polygon) enabling users to trade positions peer-to-peer, validated by an external oracle. Adventure One maintained that their product could sometimes be considered a regulated financial product, a view partially supported by the EU’s financial regulator, ESMA, which stated that certain contracts may fall under existing binary options regulations.
Nevertheless, the KSA dismissed these arguments, asserting that the aspect of chance involved in the platform’s offerings amounted to gambling services. The use of blockchain technology, crypto wallets, and decentralization does not exempt such operations from local gambling laws.
Moreover, the KSA referred to Polymarket’s marketing materials which included the term “betting.” A tagline such as "Stay informed and profit from your knowledge by betting on future events" exemplified this. Notably, wagering on political events is explicitly prohibited under Dutch law.
During its investigation, the KSA found numerous factors indicating the platform was easily accessible to Dutch users, including the ability to register with Dutch IP addresses and a Dutch-language customer service function. Users could also bet on political events and figures pertinent to the Netherlands.
Adventure One also challenged the legality and proportionality of the KSA's measures, claiming the sanctions were disproportionate and poorly justified. However, the authority maintained that it clearly articulated the legal foundation for its order, considered all submissions, and provided sound reasoning for its decisions.
The KSA defended its choice to publish the remedial order under the Dutch Open Government Act, countering claims of unfair “naming and shaming.” The regulator justified publication as a means of protecting consumers, ensuring transparency in regulatory enforcement, and serving as a deterrent.
This ruling emphasizes the growing divergence in regulatory approaches across Europe concerning decentralized prediction markets. Recently, nine European regulators united in a campaign against unlicensed prediction markets, citing various consumer protection and market integrity risks associated with platforms operating without local licenses.
