The French National Gambling Authority (ANJ) is reportedly investigating methods to prevent the operation of Polymarket, a blockchain-based prediction market platform. This comes due to increasing scrutiny of the Polymarket platform for its operation as a crypto-based betting platform, having gained traction in the US elections. ANJ's investigation focuses on the platform's alignment with French gambling laws, which strictly regulate betting activities.
Reports from French media outlet The Big Whale indicate that ANJ views Polymarket as a betting platform despite using cryptocurrency in transactions. According to an ANJ representative, Polymarket remains classified as a gambling operation under French law, making it subject to regulatory action. ANJ intends to "prohibit access" to the site due to its non-compliance with French gambling regulations. The authority's potential actions include blocking the platform's domain name and pressuring French-based services to restrict user access.
The move comes as Polymarket gains global attention, particularly for its high-profile U.S. election betting markets, which recently attracted over $3.6 billion in volume. French regulators remain concerned about the influence of significant bets placed by local traders, such as "Théo," who reportedly profited millions by betting on Donald Trump's anticipated election win.
While ANJ has the authority to restrict access to Polymarket, enforcing a complete ban poses challenges. French legal experts suggest that users could still access the platform through virtual private networks (VPNs), bypassing local restrictions. Additionally, Polymarket's reliance on blockchain technology and crypto wallets instead of traditional identity verification complicates efforts to monitor or restrict individual users.
Legal experts, including William O'Rorke, a partner at French law firm ORWL Avocats, compare Polymarket's operations to sports betting, underscoring ANJ's legal stance. "The ANJ has the authority to act even if Polymarket does not explicitly target French users," O'Rorke explained, highlighting that the regulator's broad powers include blocking access to sites facilitating unregulated gambling.
The rise of Polymarket recalls the initial regulatory pushback against decentralized finance (DeFi) projects. Mohd Kifa, compliance head at Flipster derivatives exchange, noted that skepticism around Polymarket reflects similar early reactions to DeFi. Like DeFi, Polymarket has demonstrated potential by mobilizing significant volumes and capital. Yet, concerns over liquidity and market manipulation persist, particularly in high-stakes markets like U.S. elections.