The Dutch gambling authority, Kansspelautoriteit (KSA), has upheld its previous decision to impose sanctions on Adventure One QSS Inc, the parent company of Polymarket, for providing illegal gambling services to users in the Netherlands. KSA's ruling, initially made in January, characterized Polymarket's operations as offering Dutch users the chance to win prizes or rewards by betting on the outcomes of future events, which aligns with the legal definition of gambling under Dutch law.
Under Dutch regulations, both event betting—including wagers on political outcomes—and traditional sports betting fall under activities requiring licensing. On June 23, KSA reiterated its January ruling, warning Adventure One of potential financial penalties if the company did not cease its operations within the Netherlands.
The KSA had granted Adventure One a four-week grace period to shut down its offerings, but the operator failed to meet the compliance deadline of February 17. They only implemented IP-blocking measures a day late, resulting in automatic penalties.
In March, Adventure One contested the initial sanction and requested the reimbursement of legal costs. The company argued that their platform was acting merely as an interface for an open-source blockchain network (Polygon), where users could trade peer-to-peer positions validated by external oracles. They claimed that in some situations, their product should be classified as a financial product, a position that found some support from the European Securities and Markets Authority (ESMA), which released a statement clarifying that certain contracts are subject to the binary options regulations.
However, KSA dismissed these arguments, noting that the element of chance in Polymarket’s offerings indicated it was providing gambling services. The usage of blockchain technology or decentralized protocols does not exempt operators from compliance with Dutch gambling laws. KSA pointed to Polymarket’s marketing materials, which included terms like “betting.” Specifically, it highlighted the tagline, "Stay informed and profit from your knowledge by betting on future events."
Importantly, wagering on political events is prohibited under Dutch law. In its investigation, KSA identified several factors signifying that the platform was accessible to and targeted at Dutch users—such as allowing registration from Dutch IP addresses and providing customer support in Dutch through an AI chat function. Furthermore, users could place bets on markets related to Dutch sports and politics.
Adventure One also challenged the legal grounding of the sanction, arguing it was disproportionate and lacking in legal certainty. KSA countered that it had transparently communicated the legal basis for its decisions and had considered all submissions thoroughly.
The authority defended its choice to release the remedial order under the Dutch Open Government Act, dismissing claims that such action could be viewed as unfair “naming and shaming.” They justified the publication as a means of consumer protection and transparency in regulatory enforcement.
This ruling underscores the increasing regulatory challenges for prediction markets across Europe. Recently, nine European regulators initiated a concerted effort against unlicensed prediction markets, citing significant risks related to consumer protection and market integrity for those operating without local gambling licenses.
