U.S. prediction site Polymarket to fight Dutch ban in court

Polymarket will challenge the Netherlands’ ban on the American prediction site in court, the company told Financieele Dagblad. The Dutch Gambling Authority (Ksa) ordered Polymarket to cease operations in February. But according to Polymarket, the prediction site is not gambling, but a financial product that should fall under the Dutch Authority for Financial Markets (AFM), not the Ksa.

In February, the Ksa determined that Polymarket is a gambling site operating without the required license and ordered it to cease operations in the Netherlands. The Ksa fined the company €420,000, and regulators blocked access to the U.S. site.

Polymarket will now fight that ban in court, arguing that it should be regulated by the AFM, not the Ksa. On Polymarket, users trade contracts that pay out based on whether a specific event occurs or not. According to the prediction site, this resembles the financial product futures contracts, where investors speculate on future prices of stocks, much more than it resembles gambling.

Critics told FD that if Polymarket wants to argue it is offering a financial product, the product it offers is binary options, which are already banned in most European countries. With binary options, one can only bet on two outcomes, and either win a set amount or lose their entire stake.

Users mainly use prediction sites to bet on crypto markets and current events. In the run-up to the parliamentary election in November last year, Dutch bet over $30 million on Polymarket on whether parties would win or lose seats in the Tweede Kamer, for example. The site also takes bets on the outcome of world conflicts.

In May, FD reported that after Polymarket’s ban, Dutch users largely just moved to other prediction platforms to place their bets.