Spain just pulled the plug on two of the biggest prediction market platforms in the world. The country’s gambling regulator, the Dirección General de Ordenación del Juego (DGOJ), ordered internet service providers to block access to both Polymarket and Kalshi on May 26.

The move is a precautionary measure while regulators conduct a formal investigation into whether the platforms have been operating without mandatory gambling licenses under Spanish law. That investigation is expected to last three to four months.

What Spain actually did

Under Spanish law, prediction markets fall squarely into the gambling category. And neither Polymarket nor Kalshi holds the required authorization to operate in the country.

The investigation will examine whether the platforms comply with mandatory safeguards that licensed gambling operators must maintain. Think identity verification, protections against underage gambling, and self-exclusion systems for problem gamblers. According to regulators, the platforms allegedly lack all three.

The platforms’ trading volumes tell a story of remarkable scale despite their regulatory headaches. Kalshi processed approximately $5.9 billion in trading volume over the past 30 days, while Polymarket handled roughly $3.8 billion in the same period.

A pattern, not an outlier

India restricted access to Polymarket around May 22, just days before Spain’s action. Indonesia has similarly moved to block the platforms. Across Europe, France, Belgium, Australia, and the UK have all imposed various limits or fines on prediction market operators.

The core issue is the same everywhere: regulators classify these platforms as gambling, while the platforms themselves prefer to be seen as financial instruments or information markets. Financial instruments face one set of rules. Gambling operations face another, often stricter set, with consumer protection requirements that prediction markets have historically not prioritized.

What this means for prediction market investors

Kalshi has historically taken the compliance-first approach in the US, securing CFTC approval for certain contracts. But that domestic regulatory relationship hasn’t translated into international acceptance. Polymarket, built on crypto rails, has leaned more toward permissionless access, which makes it faster to grow but more vulnerable to exactly the kind of ISP-level blocks Spain just implemented.