Polymarket Challenges KSA Gambling Classification

Polymarket has launched legal proceedings against the Netherlands Gambling Authority (KSA), challenging the regulator’s view that its prediction market contracts constitute gambling products. The company maintains that its event contracts should instead fall under financial derivatives regulation.

The court action comes after enforcement measures by the KSA concerning Polymarket’s availability to users in the Netherlands. The regulator ordered the prediction market platform to stop serving Dutch users, warning that failure to comply could result in penalties of €420,000 per week, capped at €840,000.

The KSA’s investigation into Polymarket began in 2025. During the probe, an inspector accessed the platform from the Netherlands and placed small trades on markets connected to Dutch political events.

Polymarket disputes the gambling classification, arguing that users trade positions with one another and that both pricing and settlement are driven by market activity and automated protocols rather than a conventional gambling system.

The company has also pointed to comparable platforms operating in other jurisdictions in support of its position. Polymarket has made the same case in discussions with financial regulators in the UK and Europe, including the UK Financial Conduct Authority and the European Securities and Markets Authority (ESMA).

However, the KSA rejected Polymarket’s argument in June, stating that the classification of comparable entities in other countries does not determine how such activities are categorized under Dutch law.

Polymarket’s appeal will be considered by the administrative law section of the Hague District Court. Until the court rules otherwise, the KSA’s decision remains in force, while the Netherlands continues to be listed among Polymarket’s restricted jurisdictions.

The dispute could eventually proceed to the Council of State, the Netherlands’ highest administrative court.