Portugal regulator orders Polymarket to halt operations

Portugal’s gambling regulator has instructed crypto-based prediction market Polymarket to cease offering its services in the country within 48 hours, intensifying scrutiny of online platforms that allow users to wager on political and real-world outcomes without national authorisation.

The Serviço de Regulação e Inspeção de Jogos, which oversees gambling activity under Portugal’s Tourism Authority, said the platform was operating illegally by facilitating bets without a licence and outside the country’s regulated framework. The order follows a surge in trading volumes linked to global election cycles and geopolitical events, drawing renewed attention to the risks posed by unregulated digital betting products.

Portugal watchdog moves to block Polymarket operations as officials argue that prediction markets using cryptocurrencies fall under gambling law when they involve monetary stakes and prize payouts. SRIJ maintains that Polymarket’s model, which allows users to buy and sell “shares” tied to the outcome of future events, effectively constitutes betting, regardless of how the platform labels its activity.

Under Portuguese law, online gambling can be offered only by operators licensed by the state, with strict requirements covering consumer protection, anti-money laundering controls and safeguards against problem gambling. Regulators say Polymarket does not meet these standards and has not sought approval to operate domestically.

The decision places Portugal alongside a growing list of jurisdictions tightening oversight of crypto-based prediction platforms. Authorities across Europe and beyond have expressed concern that such markets blur the line between financial trading and gambling, while often remaining outside established regulatory regimes. In Portugal’s case, the regulator cited user safety, transparency and the integrity of the betting market as key reasons for the shutdown order.

Polymarket, founded in 2020 and headquartered outside the European Union, has grown rapidly by offering markets on elections, economic indicators, sports outcomes and even cultural events. Users place bets using stablecoins, typically US-dollar-pegged tokens, with prices fluctuating based on collective expectations of an outcome’s probability. Supporters argue that the model harnesses crowd wisdom to forecast events more accurately than traditional polling or expert analysis.

Regulators, however, see a different risk profile. Portuguese officials have warned that the use of cryptocurrencies can complicate consumer redress, make age verification more difficult and increase exposure to financial loss, particularly among younger users. The absence of local oversight also raises concerns about data protection and the handling of disputes.

The timing of the order is significant. Global election cycles have driven heavy traffic to prediction markets, with large sums flowing into contracts tied to leadership contests, referendums and policy decisions. Analysts say this spike has made platforms like Polymarket more visible to regulators who were previously focused on conventional online betting sites.

Within Portugal, licensed operators have long complained that offshore platforms enjoy an unfair advantage by avoiding taxes and compliance costs. Industry representatives argue that enforcement actions are necessary to maintain a level playing field and to ensure that consumer protections apply uniformly.

The SRIJ has indicated that failure to comply with the shutdown order could lead to further measures, including website blocking and financial penalties. Portuguese law allows regulators to request internet service providers to restrict access to unlicensed gambling sites, a tool that has been used against other offshore operators in the past.

Polymarket has not publicly outlined its response to the Portuguese order. In other jurisdictions, the company has previously stated that it views itself as a prediction market rather than a gambling operator and has highlighted its use of decentralised technology. Critics counter that the economic substance of the activity, not the terminology, determines its legal classification.

The broader debate over prediction markets remains unsettled. Academic studies have suggested that such markets can produce accurate forecasts by aggregating diverse information. At the same time, policymakers worry about ethical and social implications when financial incentives are tied to sensitive outcomes such as elections or public health events.