The French National Gaming Authority (ANJ) has issued a formal warning about prediction markets, which it said it considers to be illegal gambling.
In a LinkedIn post today (24 February), the regulator stated that any service that enables users to bet on the outcome of political, geopolitical, or sporting events without a local licence constitutes unauthorised gambling.
The regulator asserted: “In France, these sites are not allowed and are considered illegal gambling sites. This is the reason why the main players have, at the request of the ANJ, set up a geo-blocking system, thus preventing any game from France (excluding VPNs).
“Because these prediction sites have several addictive characteristics similar to those observed for online gambling, but amplified due to the absence of existing protection mechanisms in the legal gambling market, the ANJ calls on users to be cautious.”
The intervention follows a significant surge in global activity for these platforms, with trade volumes reportedly challenging those of conventional sportsbooks as they reach several billion dollars.
Polymarket and Kalshi reportedly approached combined trading volume of some $40bn last year.
The ANJ stated that the major operators in the industry have put in geo-blocking measures at the behest of the regulator to ensure that users from French IP addresses cannot access their sites.
However, the regulator added that users can still find ways to circumvent these measures by using virtual private networks.
The ANJ claims that prediction markets share addictive properties with online gambling but lack the necessary protection mechanisms that are a part of the regulated market.
European countries unite against prediction markets
France is not the only European jurisdiction scrutinising the emerging prediction market sector.
Germany has adopted a hardline approach through the implementation of the State Treaty on Gambling. The German regulatory body, GGL, claims that betting on events such as election outcomes is prohibited.
While operators have argued they are not betting houses but rather information providers, the German authorities have refused to accept this, stating that the financial interest makes them subject to the regulations.
The Dutch national gambling regulator, KSA, has also directed Polymarket to stop operating in the country.
The authority considers Polymarket to be an unlicensed gambling platform, and if it fails to comply it may face fines in the country.
Outright bans shape the landscape
In Portugal and Ukraine, regulators have banned Polymarket and moved to restrict access to the platform. Authorities cited illegal gambling activity, with particular concern surrounding markets related to elections.
Hungarian authorities have also acted against Polymarket, blocking access to the platform. Officials characterised its activities as prohibited gambling under national law.
Belgium has taken enforcement action by blocking or blacklisting access to Polymarket under its gambling control regime, effectively preventing the platform from operating in the country.
In Romania, regulators have implemented measures to blacklist or otherwise restrict prediction markets, treating them as unlicensed gambling offerings in breach of domestic regulations.
In Germany, the country’s joint gambling authority issued a public warning regarding prediction market betting, highlighting regulatory concerns and urging the public to exercise caution, though without imposing a formal ban.
Betting exchanges still prosper
Conversely, the UK continues to allow betting exchanges, which many have compared to prediction markets, provided operators obtain a licence from the Gambling Commission.
However, the commission has previously taken enforcement action against unlicensed platforms that marketed their services to British residents.
The discrepancy in regulation across the continent, just like that underway in the US, has led to a fragmented market.
European regulators are now discussing whether a unified approach is necessary to manage platforms that operate via blockchain technology, which often makes enforcement difficult for individual states.
The ANJ continues to monitor for mirror sites and has advised the public that funds deposited on these platforms are not protected by French law in the event of a dispute or platform failure.
The regulator intends to continue its enforcement actions against any entity facilitating access to these markets for residents in France.