Experts underscore an ongoing classification debate—whether prediction markets are gambling, financial instruments, or require new regulatory categories—as the legal landscape adapts to MiCA and related governance.

The ruling could set a precedent across the EU, with regulators weighing whether prediction markets should be licensed like gambling or traditional financial services as part of a broader alignment with MiCA and evolving governance.

Bans in member states may shape future regulatory strategies for blockchain-based prediction markets, potentially driving compliance innovations, geofencing, and access controls by operators.

Regulators deemed Polymarket’s activities unlicensed gambling under national law, noting the use of smart contracts on the Polygon blockchain to facilitate bets.

Portugal enforces a permanent prohibition, while Hungary imposes a temporary blocking order with a pathway to review or extension, illustrating differing enforcement nuances.

The two countries’ approaches diverge on timing and permanence, and each includes its own appeals or review processes.

For users, expect geofenced access in Portugal and Hungary and potential withdrawal challenges, with Polymarket likely pursuing licensing or alternate access methods to stay operational.

The action hints at multiple futures for DeFi: reduced regulatory arbitrage, push for compliance-driven innovation, possible jurisdictional competition, and risk of industry consolidation as licensing costs bite smaller platforms.

Polymarket was banned in Portugal and Hungary in early 2025 after regulators deemed its crypto-based prediction markets illegal gambling operations under national law.

Authorities ordered ISPs to block Polymarket in both countries, with Portugal issuing a prohibition on February 15, 2025 and Hungary issuing a temporary blocking order soon after.

Portugal’s Gaming Regulatory Authority issued the prohibition on February 15, 2025, followed days later by Hungary’s National Media and Infocommunications Authority’s temporary blocking order.

Historical context shows prior crackdowns on prediction markets (like Intrade) and the rise of blockchain platforms operating in regulatory gray areas now increasingly subject to EU-wide oversight under MiCA.