Why French regulators might ban Polymarket

French gambling regulators are weighing a ban on Polymarket, a cryptocurrency prediction platform that has surged in popularity around the United States presidential election.

Polymarket has landed on the radar of France’s gambling watchdog, the Autorité nationale des jeux (ANJ), which is now evaluating its compliance with national gambling rules.

According to a spokesperson, the ANJ is closely examining the platform’s operations to determine if it falls within the legal boundaries for gambling in France.

Bloomberg reported that the regulator might soon bar French users from accessing Polymarket, despite its cryptocurrency-based structure.

A source close to the ANJ explained that although Polymarket uses digital assets, its activities constitute betting, which is “not legal in France.”

Polymarket came under the regulator’s radar after an anonymous French gambler earned roughly $79 million betting on Donald Trump’s presidential win raising concerns about market manipulation.

The bettor allegedly used 9 different accounts according to Chainalysis.

However, in a public statement, the user confirmed that all bets were based on personal views and not a market manipulation attempt.

In a separately published statement, William O’Rorke, a partner at ORWL Avocats, said Polymarket’s operations could be categorized as something like “sports betting,” due to its core model of allowing users to bet money on random outcomes.

As such, it falls under “the definition of gambling,” despite the platform’s use of cryptocurrencies, which would give the ANJ the “power to block the platform even though Polymarket does not specifically target French users.”

The rise of Polymarket

Launched in 2020, Polymarket is a decentralized prediction market platform that allows participants to bet on the outcomes of real-world events using cryptocurrency.

The platform soared in popularity throughout 2024, driven by intense public interest in the US presidential election.

In August, Bloomberg integrated data from the platform into its election tracking terminal, marking a significant milestone for the company. 

The success has led Polymarket to consider launching its own token as the company announced plans to raise $50 million in fresh funding through a new investment round.

Investors in this prospective funding round would have access to warrants allowing them to purchase tokens if the issuance proceeds. 

Polymarket also secured $70 million in funding earlier this year across two rounds, including a $45 million Series B led by Founders Fund, a venture capital firm associated with billionaire Peter Thiel.

According to data from Dune Analytics, Polymarket reached $2.5 billion in bets by October, with 88% of all wagers linked to the U.S. election.

Polymarket faces scrutiny

Despite its growing popularity, Polymarket has faced regulatory scrutiny over the years.

Headquartered in New York, Polymarket remains inaccessible to US residents due to regulatory actions by the Commodity Futures Trading Commission (CFTC).

The CFTC fined Polymarket $1.4 million and required it to halt US operations for offering binary options contracts without proper registration. 

In August, US lawmakers led by Senator Jeff Merkley requested that CFTC Chairman Rostin Behnam impose a ban on election gambling in the US. 

Although the lawmakers did not directly name Polymarket, it followed reports that the platform had seen considerable growth, amassing over 1.5 million bets with trading volume surpassing $1 billion as the US election drew closer.

Polymarket’s handling of political data recently drew scrutiny from US media last month with the New York Times publishing an article alleging that the platform was politically biased, and labeling it a “crypto-powered gambling” site. 

Polymarket CEO Shayne Coplan responded to the criticism, asserting that the Polygon-based platform functions as a neutral alternative data source, benefiting from the increased attention surrounding the election.

He argued the platform was partisan and positioned it as a prediction tool aligned with market demand.

Last week, cryptocurrency research firms Inca Digital and Chaos Labs discovered widespread wash trading on the platform.

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