French regulators are reportedly moving to restrict Polymarket, a decentralized prediction market platform, due to concerns it operates as an unlicensed gambling service.
Scrutiny Intensifies on Polymarket
The French National Gambling Authority (ANJ), responsible for overseeing legal gambling in the country, is examining whether Polymarket complies with local regulations. Polymarket allows users to place bets on future events using cryptocurrency, a model that French authorities believe classifies as gambling under national law, according to a recent report by The Big Whale, a French web3 publication.
A source close to ANJ expressed concerns, stating,
“Even if Polymarket uses cryptocurrencies in its operations, it remains a betting activity, and this is not legal in France.”
If found non-compliant, the platform could face a ban.
High-Stakes Betting Draws Attention
Polymarket’s approach has recently gained traction in Europe, especially among high-stakes users. French trader “Theo” reportedly placed significant bets on Donald Trump’s political future, amassing millions in winnings when his predictions proved correct. This particular instance has contributed to regulators’ concerns, especially as the platform continues to attract users wagering on high-profile political events. The platform witnessed over $3.2 billion in bets placed on the US presidential election.
While Polymarket’s blockchain-based operations differentiate it from traditional betting platforms by removing intermediaries, authorities remain wary. The platform’s ease of access for French users has led regulators to question its compliance with gambling laws, which are designed to prevent unauthorized betting.
Polymarket’s Position in a Complex Regulatory Landscape
France is not alone in scrutinizing Polymarket’s operations. In the United States, the Commodity Futures Trading Commission (CFTC) recently proposed regulations that would impact prediction markets like Polymarket. The CFTC’s proposal to classify event-based contracts as gambling instruments remains under consideration, with final rule-making decisions pending. These regulatory challenges could prompt Polymarket to adjust its model or potentially decentralize its operations through a future token launch to reduce regulatory pressure.
Potential for Site Blocking and Content Control
If Polymarket is deemed illegal under French law, ANJ has the power to block the platform’s domain within France and restrict its access. French regulators may also pressure media outlets to avoid linking to or promoting Polymarket. This step would align with France’s robust stance on curbing unlicensed gambling, particularly as it intersects with the crypto sector.
The ANJ has yet to announce a definitive decision, but given the regulator’s power to restrict online access, a ban seems possible.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source: https://cryptodaily.co.uk/2024/11/polymarket-under-french-scrutiny-for-unlicensed-gambling-operations