Spain Blocks Polymarket and Kalshi in Crackdown on Unlicensed Crypto Prediction Markets

Spain has moved to block two major prediction-market platforms, Polymarket and Kalshi, in a crackdown on unlicensed gambling that underscores growing global scrutiny of crypto-enabled trading sites. What happened - Spain’s gambling regulator, the Directorate General for Gambling Regulation, ordered internet service providers to block access to Polymarket and Kalshi after the Ministry of Consumer Affairs published formal sanction proceedings in the Official State Gazette on May 26. - The blocks are expected to take effect within seven to ten days and will remain in place for roughly three to four months while an investigation proceeds. Why the shutdown - Regulators say both platforms were operating as gambling operators without the required administrative authorisation, allowing users to stake money on uncertain future outcomes. - Authorities flagged the absence of legally required safeguards: no age verification, no self-exclusion mechanisms and inadequate identity checks — protections that Spanish law mandates for any online service taking money-staked wagers. - Spanish notices were explicit that using crypto or blockchain does not exempt platforms from gambling rules: the underlying technology does not change the legal character of wagering products. Political flashpoint - Timing likely intensified regulators’ response. Polymarket recently opened a market on whether Prime Minister Pedro Sánchez’s government would fall early, and Kalshi listed Sánchez at 29% odds to leave office in 2026. Both markets drew heavy attention on Spanish social media, accelerating enforcement that may otherwise have moved more slowly. A widening international clampdown - Spain joins a growing list of countries that have taken action against prediction markets: - Brazil blocked both platforms in April as part of a wider sweep affecting about 28 platforms. - Indonesia blocked Polymarket on May 25 for illegal online gambling. - India issued a formal blocking order on May 21 after reclassifying prediction markets as “money games” under rules that took effect May 1. - Portugal blocked Polymarket in January after surges in presidential election bets; Argentina imposed a court-ordered block in March. - The Netherlands stepped up enforcement in February and Belgium made a referral in March. - The Spanish move has been described as the third European-level enforcement action of 2026. Regulatory pressure beyond gambling - Enforcement pressure on these crypto-adjacent services has multiple fronts. In the U.S., the Commodity Futures Trading Commission (CFTC) has defended Kalshi’s right to operate under federal oversight and has sued states that try to restrict it — creating a divergent global regulatory map. - U.S. authorities and the Treasury are also pushing to bring unregulated financial intermediaries under Bank Secrecy Act anti-money-laundering obligations. That AML/BSA framing mirrors arguments used by Spanish regulators. - Domestic scrutiny has also come from Congress: the House Oversight Committee separately requested records from Kalshi and Polymarket over alleged insider trading risks and KYC compliance. Market footprint and implications - Polymarket is valued at about $15 billion and Kalshi at roughly $22 billion. Together, they handled several billion dollars in trading volume around the 2024 U.S. presidential election and have been expanding into sports, geopolitics and corporate-event contracts. - These enforcement actions do not shut down the businesses entirely but they materially limit access in Europe and emerging markets and add regulatory compliance and legal risk that could slow growth. Bottom line Spain’s action signals that national gambling laws and AML frameworks are increasingly being used to regulate prediction markets — regardless of whether those platforms run on blockchain technology. For Polymarket and Kalshi, and for similar operators worldwide, the next months will be pivotal as courts and regulators test where betting ends and financial regulation begins.