Portugal's gambling regulator has ordered cryptocurrency prediction market Polymarket to cease operations following a surge of over €5 million into presidential election markets just hours before official results were announced.
The Serviço de Regulação e Inspeção de Jogos (SRIJ) confirmed to Portuguese broadcaster Renascença that it deems Polymarket illegal. The platform operates without authorization, and Portuguese law explicitly prohibits betting on political events.
The regulator issued a 48-hour shutdown order to Polymarket on Friday, but the website remained accessible as of Monday.
The total volume on Portuguese presidential election markets surpassed €110 million. A significant portion of this activity was concentrated in the two hours preceding the public announcement of Socialist candidate António José Seguro's first-round victory.
Key Events and Market Shifts
Market odds for Seguro's victory saw a dramatic increase, jumping from 60% to 95% between 6 p.m. and 8 p.m. on Sunday. This occurred while polls were still open and an hour before exit polls were scheduled for release.
Concurrently, Liberal candidate João Cotrim de Figueiredo's odds experienced a sharp decline, falling from 22% to 2.5% during the same timeframe.
According to Renascença's report, this significant market fluctuation coincided with the private circulation of exit poll results among journalists and polling companies around 6 p.m.
Ultimately, Seguro secured 31% of the first-round votes, ahead of far-right candidate André Ventura, who garnered 24%. Both candidates are set to advance to a runoff election scheduled for February.
The SRIJ informed Renascença that its regulatory authority extends only to licensed operators within Portugal. The regulator also stated that it cannot guarantee Portuguese users will be able to recover funds invested on the platform once a blocking order is enforced.
Broader Regulatory Context
Portugal joins a growing list of European countries that have imposed restrictions on Polymarket. France, Belgium, Poland, Romania, and Switzerland all implemented similar measures throughout the previous year.
Polymarket, founded in 2020 by Shayne Coplan, received substantial investment, securing up to $2 billion from Intercontinental Exchange in October. This investment valued the company at approximately $8 billion.
The platform utilizes blockchain technology and the USDC stablecoin, which is pegged to the U.S. dollar. This enables users to buy and sell positions based on the predicted outcomes of various events.
The current regulatory actions highlight the persistent challenges governments face in enforcing gambling laws and restrictions on cryptocurrency-based platforms. This situation underscores the ongoing tension between decentralized prediction markets and national regulatory frameworks.