The Kansspelautoriteit (KSA), the Dutch gambling regulator, has ruled against an appeal put forward by Adventure One QSS Inc, the company that operates prediction market platform Polymarket in the country.
KSA Doubles Down on Polymarket Opposition
Essentially, the KSA maintained what it had previously found to be true, i.e., Polymarket had offered games that included prizes or rewards by having consumers place trades on the outcome of future events.
According to the regulator, this was still categorized as gambling under the national framework. Polymarket has been loath to admit as much, insisting that its offer is distinct from gambling and that it is trades that users are able to place.
The regulator reaffirmed that the products offered by Polymarket were indeed a form of gambling and would therefore have to be regulated under the country’s laws. The ruling was published on June 23 and essentially reaffirmed that it would pursue enforcement action against the platform’s parent company if it fails to comply with local regulation.
Adventure One argues that the platform is an open-source blockchain protocol that allows users to engage in peer-to-peer trades and pointed out that there was precedent to regulate such trades as a financial product.
The KSA, however, maintained that there is a clear element of randomness or chance that is more akin to gambling than to making an informed decision about a financial outcome.
The regulator also argued that just because a platform used cryptocurrency and blockchain technology, this did not mean that it was not offering a form of gambling – nor did it exempt it from the applicable laws.
Regulator Cites What It Sees as Self-Admission of Guilt
The regulator also used an argument that cited Polymarket’s own marketing materials – something that is important to note because such platforms openly used “gambling” promotional language in the United States, with their apps urging users to “bet on outcomes.”
The same language was used in the case of Polymarket’s Dutch operations: “Stay informed and profit from your knowledge by betting on future events.”
While Polymarket has repeatedly argued that it is not a gambling platform, the language it has used seemed to appeal to people who generally gamble.
Another point the regulator raised was that the platform appeared to be purposefully targeting consumers in the Netherlands by offering materials in Dutch.