Dutch Regulator Imposes €420,000 Penalty on Polymarket While Battling Black Market Surge
The Kansspelautoriteit (KSA) has begun enforcing weekly fines of €420,000 against Adventure One, the operator of Polymarket. The Netherlands views the predictions platform’s activity as unlicensed gambling, a stance the company failed to address despite a February warning.
This decision highlights a clear regulatory divergence. While the CFTC in the US has backed predictions platforms like Polymarket and Kalshi as financial derivatives, European regulators classify them as gambling requiring a local licence.
Polymarket did not cease operations in the Netherlands after the initial warning. The KSA confirmed on 16 June it would implement the penalties as promised.
Regulatory Divergence on Predictions Markets
The Netherlands has positioned itself as a strict jurisdiction on predictions. Platforms such as Kalshi and Polymarket are treated as gambling, demanding the correct licence from the KSA.
Polymarket and Kalshi maintain their products function as financial services akin to derivatives trading. This position enjoys support from the CFTC in the US.
Yet many European and Latin American regulators reject that framing. The result is a fragmented global landscape for these platforms.
In contrast, Gibraltar has granted betting intermediary licences to prediction platforms ADI Predictstreet and WagerWire. Even there, the firms operate under betting and gaming regulations.
For Polymarket and Kalshi, accepting a gambling licence in Europe would undermine their legal arguments against US state gambling regulators. This tension forms an inflection point for the sector.
Black Market Pressures in the Netherlands
The Polymarket penalty arrives as the Netherlands fights persistent illegal gambling. The battle has intensified since the re-regulation of the Remote Gaming Act (KOA Act) in October 2021.
Dutch operators and the KSA have grown frustrated by the rise in offshore activity. The regulator has responded by fining companies targeting the Dutch market.
In the latest action, the KSA charged Costa Rica-based Chestoption Sociedad de Responsabilidad Limitada, operator of Vave.com, €3,082,000. This marks the second fine for the firm.
“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 now plans to grant the KSA greater powers against illegal gambling. At the same time, it proposes further restrictions on the legal market, including a ban on online gambling advertising.
Risks and Limitations of the Current Approach
Heavy taxes at 37.8% of gross gaming revenue, combined with existing marketing limits, have arguably fueled the black market according to industry voices. Many Dutch operators view additional advertising bans as counterproductive.
Enforcing fines against offshore entities presents practical difficulties. Collecting payments from companies based outside the jurisdiction is rarely straightforward.
The KSA acknowledges this challenge. It states it is involved in “intensive collaboration with third parties” such as payment service providers, hosting parties, banks, and major tech companies.
This reliance on indirect measures carries risk. If legal operators face mounting restrictions while black market sites thrive, the regulated sector could lose further ground.
From my perspective after decades observing gaming regulation, such structural conflicts rarely resolve cleanly. They often push activity into less accountable channels.
Implications for US State and Tribal Battles
The Dutch classification reinforces the regulatory divergence that Polymarket and Kalshi face globally. Their rejection of gambling status in Europe protects their US positioning.
Back home, these platforms continue to clash with state gambling regulators. Accepting a gambling licence abroad could weaken their arguments that event contracts fall outside traditional gaming definitions.
This divergence matters for tribal sovereignty considerations as well. As someone who has spent decades advising on tribal gaming matters, I see how inconsistent classifications complicate efforts to secure a meaningful seat at the table for tribes in emerging verticals.
The CFTC’s derivatives stance offers one pathway. European gambling framings offer another. The resulting tension creates strategic complexity for operators and regulators alike.
The Bottom Line
The KSA’s enforcement against Polymarket and offshore sites like Vave.com underscores a jurisdiction determined to protect its licensed market. Yet the combination of high taxes, advertising curbs, and enforcement hurdles risks strengthening the very black market it seeks to curb. For predictions platforms, this regulatory divergence sharpens the stakes in their US battles and highlights the need for clearer international alignment. Operators and policymakers should watch how these tensions evolve, particularly as they intersect with tribal sovereignty and the future of event contracts. Schedule a meeting with SCCG Management to discuss implications for your strategy.
