Polymarket Portugal Ban: Shocking 48-Hour Shutdown Order Rocks Crypto Prediction Markets

LISBON, Portugal – In a decisive regulatory move, Portugal’s gambling authority has issued a stunning 48-hour ultimatum to the cryptocurrency prediction market platform Polymarket, demanding an immediate cessation of all operations within the country. This dramatic enforcement action, first reported by CoinDesk, centers on the platform’s facilitation of political event betting, specifically highlighting that over $120 million had been wagered on Portugal’s recent presidential election outcome. Consequently, this development marks a significant escalation in the global scrutiny facing decentralized prediction markets and their complex legal status.

Polymarket Portugal Ban: The Immediate Regulatory Order

The Serviço de Regulação e Inspeção de Jogos (SRIJ), Portugal’s official gambling regulator, delivered the formal cease-and-desist directive. The agency’s core argument hinges on a clear national prohibition: betting on political events and election outcomes constitutes illegal gambling under Portuguese law. The regulator identified specific markets on the Polymarket platform that allowed users to speculate on the results of the March 2025 presidential election. Moreover, the SRIJ emphasized that the platform was operating without the necessary national gambling license, placing it firmly outside the legal framework.

This action is not an isolated incident but rather part of a broader, coordinated effort. For instance, the regulator referenced ongoing investigations and communications with internet service providers (ISPs) to technically enforce the blockade. The 48-hour compliance window represents a standard but urgent procedural step, giving the platform a brief period to withdraw services before facing potential legal penalties and reinforced access restrictions.

Global Crackdown on Crypto Prediction Markets

The Polymarket Portugal ban reflects a widening international regulatory net. Currently, the platform faces access restrictions or outright bans in approximately 30 jurisdictions worldwide. Notably, this list includes technologically advanced nations like Singapore and Italy, as well as others with stringent financial controls like Russia and Belgium. Each country presents a unique legal rationale, but common themes include concerns over unlicensed gambling, market manipulation, and the potential for real-world event interference.

To understand the scale of this regulatory challenge, consider the following comparison of major jurisdictions that have restricted Polymarket:

Country	Year of Action	Primary Legal Grounds
Singapore	2022	Violation of the Remote Gambling Act
Italy	2023	Lack of CONSOB (market regulator) authorization
Belgium	2023	Unlicensed betting services
Portugal	2025	Illegal political betting & lack of license

This pattern demonstrates a clear trend: regulators are increasingly unwilling to grant crypto-native prediction platforms a special exemption from traditional gambling and financial market laws. The decentralized and borderless nature of these platforms creates a significant enforcement dilemma, leading authorities to target accessibility through local ISPs and app stores.

Expert Analysis: The Legal Tightrope of Prediction Markets

Legal scholars and fintech analysts point to the fundamental tension at play. On one hand, prediction markets can function as powerful information aggregation tools, potentially offering insights into event probabilities that surpass traditional polls. On the other hand, they operate in a legal gray zone between financial instruments, gambling products, and social platforms. Dr. Elena Silva, a professor of digital law at the University of Lisbon, explains the Portuguese perspective: “The law draws a bright line: betting on sovereign processes, like elections, is prohibited. This is rooted in protecting democratic integrity from financial influence and manipulation. A platform facilitating such markets, regardless of its technological base, violates this principle.”

The $120 million wagered on the Portuguese election, as cited by the regulator, underscores the substantial economic activity involved. This volume attracts regulatory attention for several key reasons:

Consumer Protection: Users may not be aware they are participating in illegal activity.
Market Integrity: Large sums could theoretically incentivize bad actors to influence real-world outcomes.
Taxation & Control: Unregulated flows of capital escape national oversight and taxation.

Furthermore, the response from Polymarket and similar platforms typically involves geofencing—using technology to block users from restricted countries. However, regulators often find these measures insufficient, especially when users employ virtual private networks (VPNs) to bypass blocks, prompting more aggressive enforcement like the current ISP-level order in Portugal.

The Ripple Effects on the Crypto and DeFi Ecosystem

This regulatory action sends shockwaves beyond a single platform. It serves as a critical test case for the entire decentralized finance (DeFi) and “decentralized science” (DeSci) sector, where prediction markets are a foundational application. Other platforms like Augur and Zeitgeist are undoubtedly monitoring the situation closely. The precedent set here could accelerate regulatory drafting in other European Union member states, potentially leading to a harmonized EU-wide approach under existing frameworks like MiCA (Markets in Crypto-Assets).

For crypto investors and users, the immediate impact is a reminder of the persistent jurisdictional risk. Assets tied to a platform’s utility or governance tokens can experience high volatility following news of a country-wide ban. In the longer term, sustainable platforms may be forced to pursue one of two paths: proactive engagement with regulators to obtain specific licenses, or a strategic retreat to jurisdictions with more permissive or undefined legal stances, accepting a smaller, fragmented user base.

Conclusion

The Polymarket Portugal ban represents a pivotal moment in the clash between innovative blockchain applications and established regulatory regimes. The 48-hour shutdown order, triggered by illegal political betting, highlights a non-negotiable red line for many nations. As global authorities continue to refine their approach to cryptocurrency and decentralized platforms, prediction markets remain a primary battleground. The outcome of this ongoing struggle will significantly shape whether these tools can operate within mainstream legal frameworks or remain confined to the regulatory periphery. The Polymarket case in Portugal is therefore not just a local enforcement action, but a bellwether for the future of decentralized information markets worldwide.

FAQs

Q1: Why did Portugal ban Polymarket?
Portugal’s gambling regulator (SRIJ) ordered Polymarket to cease operations because the platform allowed betting on political events, specifically the presidential election, which is illegal under Portuguese law. The platform also lacked a national gambling license.

Q2: What is a cryptocurrency prediction market?
A cryptocurrency prediction market is a decentralized platform, often built on blockchain technology like Polygon (which Polymarket uses), where users can buy and sell shares based on the predicted outcome of real-world events. Prices reflect the crowd’s perceived probability of an event occurring.

Q3: In how many countries is Polymarket now restricted?
Following the Portugal ban, Polymarket faces access restrictions in approximately 30 countries, including Singapore, Italy, Belgium, Russia, and Ukraine. Each country has its own legal rationale for the restriction.

Q4: Was the $120 million in election bets lost?
No, the $120 million figure represents the total volume of wagers placed on contracts related to the Portuguese presidential election outcome on the Polymarket platform. This is the total amount of value staked by users, not lost. Winnings are distributed to those who predicted correctly.

Q5: Can users in Portugal still access Polymarket with a VPN?
While a Virtual Private Network (VPN) can technically mask a user’s location, the Portuguese regulator’s order likely includes directives to internet service providers (ISPs) to block access to the platform’s domains. Using a VPN to circumvent a ban may also violate the platform’s own terms of service and could be considered a violation of Portuguese law by the user.