Spain Orders ISPs to Block Polymarket and Kalshi
Spain’s gambling regulator (DGOJ) has ordered ISPs to block Polymarket and Kalshi after finding both operate in Spain without required gambling licenses. The order, published in Spain’s official gazette, also starts disciplinary proceedings and requires ISPs to comply within about 7–10 days.
The DGOJ said Polymarket and Kalshi lack mandatory safeguards, including age checks and controls for self-excluded users. Spain’s licensed operators must run systems such as self-exclusion registries, deposit limits and identity/age verification.
The disruption is expected to last 3–4 months while the case is investigated. This is the third European move this year, following actions in the Netherlands (February) and Belgium (March), reinforcing a broader EU trend to regulate prediction markets as gambling products.
Broader context: Indonesia previously blocked Polymarket, India moved to restrict it earlier in May, and U.S. authorities are also increasing scrutiny. For crypto traders, the key risk is renewed regulatory headline volatility around crypto-linked prediction markets, with near-term sentiment pressure likely as access tightens in Spain.
Bearish
This is a direct regulatory tightening on Polymarket and Kalshi in a major EU market. In the short term, the ISP block (7–10 days) and the 3–4 month process can reduce access, suppress user inflows, and amplify “risk-off” sentiment for crypto-linked prediction market activity—creating headline-driven volatility.
In the long run, the move also signals that EU regulators are converging on a gambling-style compliance model (age checks, self-exclusion registries, deposit limits). That may force platforms to redesign operations or licensing strategies. However, because this is not a global shutdown and is time-bounded pending investigation, the effect on broader crypto prices is likely sentiment-driven rather than fundamentally destructive—unless additional jurisdictions escalate at similar speed.