The Dutch Gambling Authority announced this week a landmark ruling for the prediction market industry: the formal rejection of the appeal by Polymarket operator Adventure One QSS Inc, upholding the illegal gambling sanctions decision made in January this year. In the new ruling signed on June 23, KSA systematically refuted Polymarket's core defenses—that the platform is merely an interface of the open-source blockchain protocol Polygon, and some contracts should fall under financial rather than gambling regulation—and clearly stated that the use of blockchain technology, cryptocurrency wallets, and decentralized protocols does not exempt from the jurisdiction of Dutch gambling laws. The PASA official website noted that since Polymarket failed to shut down services to Dutch users within the four-week grace period on February 17, and only implemented IP blocking the following day, fines have been automatically accumulating since then.
KSA systematically refutes: You call it trading, the law calls it gambling
KSA's initial investigation determined that Polymarket offered Dutch users "the opportunity to compete for prizes or compensation by betting on the outcomes of future events," an action that fully complies with the Dutch legal definition of gambling. During the appeal process, Polymarket put forward two core arguments.
The first is the decentralization defense. Adventure One argued that its platform is just an interface of the Polygon public chain, where users conduct peer-to-peer position trading through cryptocurrency wallets, with results verified by external oracles—the actual gambling occurs on-chain, not in activities hosted by the platform itself. KSA's response hit the nail on the head: the element of "chance"—the uncertainty of outcomes beyond the decisive influence of participants—already exists in its services. No matter what underlying technology stack is used, what is presented and operated to end-users is still a gambling product.
The second is the financial regulation defense. Polymarket argued that certain event contracts should be considered regulated financial products under specific circumstances. This position was partially corroborated by ESMA's statement this week—confirming that some prediction market contracts do fall under the MiFID II category. However, KSA's focus is not on how contracts are defined under financial law, but on whether the overall product characteristics— including betting behavior, chance, and rewards—constitute gambling activities under Dutch gambling law when targeted at Dutch users.
"Betting" written in your advertisement, don't say you're not gambling
KSA also pointed out a perhaps most difficult fact to refute in the ruling: Polymarket's own marketing materials prominently used the word "betting." The platform had slogans like "Stay informed, profit from your knowledge by betting on future events." Under Dutch law, betting on political events and similar event contracts is already within the prohibited range of gambling activities, and Polymarket's investigation found that the platform not only allowed Dutch IP users to register but also equipped with Dutch AI customer service and provided markets specifically for Dutch political and sports figures. For regulators, this is not a blockchain protocol located overseas with no connection to the Netherlands—it is a gambling platform actively targeting Dutch users at multiple touchpoints.
Adventure One challenged the legal basis, procedural appropriateness, and proportionality of the sanctions on three levels, arguing that the sanctions were excessive, legally uncertain, and insufficiently motivated. KSA rejected all, confirmed the clear communication of the legal basis of the order, invited and reviewed the defense arguments, and provided sufficient reasons in all decisions. The regulator also defended the practice of publicizing enforcement decisions under the Dutch Open Government Act, rejecting the claim that "public exposure is an unfair practice"—the purpose of publicity is consumer protection, enforcement transparency, and deterrence effect.
The division in Europe is deepening
The timing of this ruling coincides with the ongoing expansion of regulatory discrepancies among European countries regarding decentralized prediction markets. Last month, nine national gambling regulators launched a joint enforcement action against unlicensed prediction market platforms, emphasizing consumer protection and market integrity risks. Earlier this month, ESMA issued another set of signals from a financial regulatory perspective on the classification of prediction market contracts. PASA's official website believes that the case of Polymarket's appeal being rejected in the Netherlands essentially provides other European regulatory authorities with two things: one is a ready-made legal argument template—decentralized technology cannot serve as a haven to evade gambling regulation; the other is a clear signal—when a platform actively operates targeting users in a certain jurisdiction, no matter where its servers are or whether its protocol is deployed on a public chain, local law will catch up.
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