Spain regulator opens probe into Polymarket & Kalshi

Spain’s Directorate General for the Regulation of Gambling has opened a formal sanctioning procedure against Polymarket and Kalshi over alleged gambling-law violations, according to Bitcoinist reporting carried by coinsnews.com. The authority also ordered both platforms’ websites blocked throughout Spain as a precaution while the case proceeds.

Licensing is the central issue

The regulator alleges that both companies operate in Spain without the required administrative license. Its position is that prediction markets fall within the country’s gambling rules because participants wager on outcomes that have not yet been determined, according to the report.

Under that interpretation, operators need a specific administrative license to serve the Spanish market. The authority said unauthorized services lack the technical and regulatory assurances required for gambling, including identity checks, protections against underage access, controls covering self-excluded or banned users, and oversight standards intended to safeguard participants.

A final decision is expected in roughly three to four months, according to the report. The nationwide blocking order is an interim measure, rather than the conclusion of the sanctioning procedure.

Pressure extends beyond Spain

The Spanish proceedings follow other setbacks described by Bitcoinist, including an exploit affecting Polymarket and a ban on the platform in Indonesia on Monday. The Indonesian restriction followed heightened local scrutiny of a wager concerning the President’s term. Indonesia’s Ministry of Communication and Digital Affairs said its action was meant to protect the public, particularly younger users and people active in digital spaces.

In the US, Representative James Comer announced a formal investigation into both platforms and asked their CEOs to explain their methods for identifying and preventing insider trading. According to the report, that inquiry followed suspicious transactions associated with classified US military operations and geopolitical events.

What it means for prediction markets

• Access restrictions precede a final ruling: Spain has ordered nationwide website blocking while the allegations remain under review.
• Local classification matters: The Spanish case turns on treating prediction markets as gambling subject to administrative licensing, with associated user-protection requirements.
• The decision window is approximate: The reported three-to-four-month timetable provides a period to monitor, not a fixed ruling date or a predetermined outcome.
• The investigations concern different issues: Spain’s action focuses on authorization and safeguards; Comer’s US inquiry concerns the platforms’ handling of potential insider trading.