The Dutch gambling regulator has made good on its word to hit predictions market giant Polymarket with financial penalties, charging the company €420,000 (£363,000).
Back in February, Polymarket was warned that it would be hit with a weekly fine of €420,000 if it did not cease its activity in the Netherlands. The US-based predictions platform was told that its Dutch activity was considered illegal gambling.
It seems that Polymarket did not take this on board. The Kansspelautoriteit (KSA), the gambling regulator, confirmed on 16 June that it would begin implementing the fines against Adventure One, which operates Polymarket, as promised.
The Netherlands has clearly set itself out as a strict jurisdiction regarding predictions, very clearly viewing platforms like Kalshi and Polymarket as a form of gambling – therefore requiring the correct licence with the regulator.
Kalshi and Polymarket have long maintained that their products are a form of financial services, akin to derivatives trading. This has been backed by the Commodities Futures Trading Commission (CFTC) in the US, but in many European and Latin American jurisdictions, regulators are not on board.
This has not stopped some regulators from seeing predictions as a potential part of the betting and gaming ecosystem. Gibraltar has granted betting intermediary licences to two prediction platforms, ADI Predictstreet and WagerWire.
However, in both cases the firms are still licensed under betting and gaming regulations.
For Kalshi and Polymarket, this would be unacceptable as they do not view themselves as gambling, and doing so in Europe would undermine their cases against various US state gambling regulators back home.
Polymarket penalty amid black market battle
Meanwhile, back in the Netherlands, the KSA making good on its plans to penalise Polymarket also comes as the country continues to fight a long-running battle which has plagued its online betting market since the re-regulation of the Remote Gaming Act (KOA Act) in October 2021.
Dutch gaming operators and the regulator have both been frustrated by the rise in illegal gambling activity over the past few years. For its part, the KSA has been actively fining offshore companies targeting the Netherlands.
In the latest instance of this, the regulator has charged the operator of the Vave.com betting site, Costa Rica-based Chestoption Sociedad de Responsibilidad Limitada, a fine of €3,082,000. This is the second time the firm has been stung.
“Costa Rica-based Chestoption offered websites in English and advertised in Dutch, thereby actively targeting Dutch gamblers. Furthermore, no measures were taken to prevent participation from the Netherlands,” the KSA’s statement explained.
“The websites featured multiple aggravating circumstances, such as the absence of age verification and autoplay and/or turboplay. It was also possible to pay with cryptocurrencies on the websites.”
The Dutch government has recently announced plans to grant the Dutch regulator more powers to deal with illegal gambling. This has come, however, alongside plans to further restrict the legal market, most notably a proposed ban on online gambling advertising.
For many Dutch operators, this will be seen as counterproductive. The industry has long argued that heavy taxes, currently standing at 37.8% of gross gaming revenue (GGR), alongside already extensive marketing restrictions, have helped the black market to flourish.
And while the KSA is keen to fight the illegal market, it faces a difficulty in that collecting fines from offshore companies is not an easy process.
The regulator states that it is involved in “intensive collaboration with third parties” such as payment service providers, hosting parties, banks, and major tech companies, to achieve its goals against the black market.
