Polymarket Challenges Dutch Ban as Derivatives Classification Dispute Continues

Polymarket is challenging a Dutch order to stop serving users in the Netherlands, arguing that its event contracts should be overseen as financial products under Dutch law rather than treated as gambling.

The Dutch Gambling Authority (Ksa) ordered Adventure One QSS Inc., Polymarket’s operator, to stop offering the service in the country. The order set a penalty of €420,000 per week for noncompliance, capped at €840,000.

Polymarket argued that users trade positions with one another through a protocol, while market activity and the protocol’s rules shape prices and settlement. The Ksa rejected that reasoning. Its January order said trading before an event’s outcome does not change the uncertainty of the final result, which depends on an external event.

The penalty is a separate point of dispute. Polymarket said it began blocking Dutch IP addresses on Feb. 18, after the regulator’s deadline. The Ksa later determined that €420,000 had been forfeited and moved to collect it. The company’s court challenge followed the Ksa’s rejection of its objection in June.

European Securities and Markets Authority guidance adds a regulatory dimension to the classification debate. Event contracts may qualify as derivatives depending on the event. If a contract qualifies as a derivative, national binary-options rules bar firms from marketing, distributing or selling it to retail clients. That treatment does not necessarily resolve whether a contract may also be considered gambling under national law.