Spain Blocks Kalshi and Polymarket Over Gambling Law Violations

Spain’s gambling regulator has ordered internet service providers to block access to prediction market platforms Kalshi and Polymarket, citing potential violations of the country’s gambling laws. The blocking order, published in Spain’s Official State Gazette on May 26, 2026, makes Spain the latest country to crack down on the two platforms that together dominate nearly 90% of global prediction market volume.

Spain Orders ISP-Level Blocks on Kalshi and Polymarket

The Dirección General de Ordenación del Juego (DGOJ), Spain’s Directorate General for Gambling Regulation operating under the Ministry of Consumer Affairs, issued the temporary blocking order against both platforms. The action was formally published in the Boletín Oficial del Estado, Spain’s official gazette.

Spanish ISPs have been ordered to enforce network-level DNS and IP blocks within 7 to 10 days. The DGOJ also opened formal sanctioning procedures against both platforms, with a definitive ruling expected in 3 to 4 months.

Both platforms were cited for operating without mandatory administrative gambling licenses under Spanish law. The regulator also flagged a lack of identity verification, minor-access controls, and self-exclusion mechanisms. Attempts to notify the operators at known foreign addresses were unsuccessful before the sanctions were published.

Over the past 30 days, Kalshi recorded approximately $5.9 billion in trading volume while Polymarket handled roughly $3.8 billion, together accounting for about 88% of the approximately $11 billion in sector-wide prediction market volume.

Why Spain Classifies Prediction Markets as Illegal Gambling

Under Spain’s Gambling Act, any platform where users place bets on uncertain future outcomes for financial gain requires a specific administrative license. The DGOJ applies the same legal standard used in France, Germany, Belgium, Portugal, Romania, the Netherlands, and Poland.

Neither Kalshi nor Polymarket holds a Spanish gambling license. In the United States, Kalshi operates as a CFTC-designated contract market, while Polymarket is relaunching domestically following a 2022 CFTC settlement. The regulatory gap between the US financial derivatives framework and Europe’s gambling classification is at the heart of this story.

One market that likely drew particular scrutiny: Polymarket’s active contract on whether Prime Minister Pedro Sánchez will leave office. As of May 26, the market priced a 41% probability of Sánchez departing by December 31, 2026, with $327.8K in volume on that single contract. According to unconfirmed reports, Kalshi listed Sánchez at 29% probability of leaving office in 2026.

The existence of political betting markets involving a sitting head of state illustrates precisely why Spanish regulators view these platforms as gambling operations requiring oversight, not simply financial instruments. This dynamic mirrors how community-driven crypto platforms have increasingly drawn regulatory attention as they blur the line between financial products and entertainment.

A Growing Global Crackdown on Prediction Markets

Spain’s action follows a rapidly expanding wave of international enforcement. Indonesia blocked Polymarket just one day earlier on May 25. Brazil banned approximately 28 prediction platforms in April. Portugal blocked the platforms in January, and Argentina issued a court-ordered block in March.

Polymarket is now blocked in more than 12 countries, including France, Germany, Belgium, the UK, Australia, India, Ukraine, Taiwan, Thailand, China, and Japan. The pace of enforcement has accelerated sharply in 2026, resembling the kind of regulatory front-running that crypto markets have experienced across multiple sectors.

In the United States, the regulatory picture is moving in the opposite direction. The CFTC maintains exclusive federal jurisdiction over prediction markets and is actively suing states that attempt to ban them. Minnesota became the first US state to pass a ban, with Governor Tim Walz signing a bill making the operation or advertising of prediction markets a felony effective August 1, 2026.

This creates a striking global bifurcation: the US federal regulator is defending prediction markets while the EU and much of Asia are banning them. Malta and Gibraltar have taken a third path, already licensing at least one prediction market operator and exploring formal regulatory frameworks.

What Comes Next for Kalshi and Polymarket in Spain

The DGOJ’s blocking order is precautionary, not final. The full sanctioning case will run its 3 to 4 month course before a definitive ruling. During that period, both platforms have several options: seek a Spanish gambling license, legally challenge the classification of prediction markets as gambling, or adjust their offerings to comply with local regulations.

ISP-level blocks are the enforcement mechanism, but they are notoriously porous. VPN usage can circumvent DNS and IP restrictions, raising questions about practical enforcement, a challenge that has plagued similar efforts in countries like jurisdictions dealing with decentralized protocol access.

The broader crypto market is absorbing this news during a period of caution, with the Fear & Greed Index sitting at 34, firmly in “Fear” territory. Whether Spain’s action triggers further EU member states to follow, or whether a harmonized European framework emerges to replace the current patchwork of national gambling laws, will shape the future of prediction markets on the continent.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.