Spain has ordered internet providers to block access to prediction markets Polymarket and Kalshi, hitting two of the highest-profile crypto-enabled betting platforms as part of a wider gambling crackdown.
What happened
- On May 26 the Ministry of Consumer Affairs published formal sanction proceedings in Spain’s Official State Gazette, and the Directorate General for Gambling Regulation instructed ISPs to block both sites. The block is expected to take effect within seven to ten days and will remain in place for roughly three to four months while regulators complete their investigation.
- Spanish authorities say Polymarket and Kalshi were operating as illegal gambling operators because they accept money-staked bets on uncertain future outcomes without the necessary licences and safeguards. Regulators specifically cited an absence of age verification, self‑exclusion tools and identity checks required by Spanish gambling law.
Why this matters politically
- The move comes at a politically sensitive moment. Polymarket opened a market on whether Prime Minister Pedro Sánchez’s government would collapse early, and Kalshi showed Sánchez at roughly 29% odds of leaving office in 2026. Both markets attracted heavy traffic on Spanish social media, which officials say accelerated scrutiny that may otherwise have taken longer.
Regulators: crypto is not a free pass
- Spain’s notices were explicit: “Using crypto or blockchain doesn’t change platforms that let users wager on uncertain outcomes from being gambling products.” That legal framing—treating crypto-backed prediction markets as gambling products subject to national rules—has been adopted by several jurisdictions this year.
A growing global enforcement wave
- Spain’s action is part of an expanding international response to prediction markets:
- Brazil blocked both platforms in April as part of a sweeping action affecting about 28 platforms.
- Indonesia blocked Polymarket on May 25.
- India issued a formal blocking order on May 21 after reclassifying prediction markets as “money games” under rules effective May 1.
- Portugal blocked Polymarket in January after a surge in presidential election bets.
- Argentina implemented a court-ordered block in March.
- The Netherlands stepped up enforcement in February and Belgium made a referral in March—making Spain the third European-level enforcement action of 2026.
Industry context and scale
- Polymarket and Kalshi are major players: Polymarket is valued at about $15 billion and Kalshi around $22 billion. Together they processed several billion dollars in trading volume around the 2024 U.S. presidential election and have since expanded into sports, geopolitics and corporate-event contracts. National blocks don’t shut these businesses down globally, but they do significantly restrict access in Europe and other emerging markets.
U.S. divergence and broader regulatory trends
- The regulatory map is diverging. In the U.S., the Commodity Futures Trading Commission has defended Kalshi’s right to operate under federal oversight and has challenged states that try to impose their own bans. At the same time, AML enforcement and efforts to bring unregulated financial intermediaries under Bank Secrecy Act-style rules have become the dominant compliance pressure for crypto-adjacent services in 2026—an approach echoed by Spain’s justification for the action.
- Congress has also taken an interest: the House Oversight Committee has requested records from both Kalshi and Polymarket over insider‑trading and KYC concerns, adding another layer of scrutiny.
Bottom line
Spain’s block underscores a fast-evolving regulatory environment: prediction markets that use crypto or blockchain are increasingly being treated as gambling products by national authorities, and enforcement is spreading across multiple continents. For Polymarket and Kalshi, the immediate impact is a loss of access to Spain (and in many cases other jurisdictions), while long-term business models face pressure to adapt to differing national rules and heightened AML/KYC demands.
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