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Polymarket Faces Regulatory Block in France Over Illegal Gambling Concerns

French-regulator-blocks-crypto-predictions-operator-PolymarketFrance’s gambling regulator, l’Autorité Nationale des Jeux (ANJ), has imposed a geo-block on Polymarket.com, a crypto-based prediction market platform, over allegations of illegal gambling. The platform, operated by Web3 developer Adventure One QSS and licensed in Panama, has been restricted from serving users in France since November 21, 2024.

Illegal Games of Chance in Focus

ANJ monitored Polymarket throughout November, identifying concerns over its offerings, including online games of chance such as slots, which remain prohibited under French law. These activities prompted ANJ to contact Adventure One QSS, leading to the implementation of geoblocking measures to restrict access for French users.

French residents attempting to access Polymarket now encounter a pop-up message explaining the restriction. Despite this, reports indicate that users have managed to bypass the block by using virtual private networks (VPNs), raising concerns about the effectiveness of such measures.

In addition to gambling violations, Polymarket’s prediction markets—where users trade shares on event outcomes—have drawn scrutiny for potential insider trading. A particularly notable case involved a French trader, known as “Theo,” who allegedly placed bets between $28 million and $40 million on Donald Trump winning the 2024 U.S. presidential election. The volume of these bets sparked fears of market manipulation and heightened regulatory focus on the platform.

Broader Issues with Polymarket

Polymarket has faced similar legal challenges outside France. In 2022, the platform was fined $1.4 million by the U.S. Commodity Futures Trading Commission (CFTC) for operating without proper registration. Trading was temporarily halted following the penalty.

As of now, the ANJ has added Polymarket to its growing blacklist of over 944 URLs that violate French gambling laws. The regulator warns users about the risks of playing on unlicensed platforms, including potential identity theft, fraud, and non-payment of winnings.

“In general, the ANJ would like to warn people who play on illegal sites because they are exposing themselves to particularly serious risks,” the regulator said in a statement. It also advises players to consult its official list of licensed operators to ensure they are gambling legally.

Future of Online Slots in France

The Polymarket case arises at a time when France is reevaluating its stance on online gambling. In October 2024, the French government proposed an amendment to its 2025 budget, aiming to legalize online casino games, including slots. This move, supported by Budget Minister Laurent Saint-Martin, is set to undergo a six-month consultation in 2025.

While new legislation may take years to materialize, the consultation could pave the way for regulated online slots to launch by 2026. For now, ANJ remains firm in its enforcement of existing gambling laws, as demonstrated by its actions against Polymarket.

Challenges for Crypto-Based Platforms

Polymarket’s case highlights the difficulties crypto-based prediction platforms face in navigating regulatory landscapes. These platforms operate at the intersection of gambling, blockchain, and financial markets, often attracting scrutiny from multiple jurisdictions.

As Polymarket works to address compliance concerns in France, the broader question of how regulators manage crypto prediction markets remains unresolved. The platform’s ongoing engagement with stakeholders and adjustments to its offerings may shape its ability to operate within legal frameworks moving forward.

Source:

“French regulator blocks crypto operator Polymarket“, igamingbusiness.com, December 2, 2024.

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Dutch Gambling Market Sees Growth Amid Channelisation Concerns

Dutch-gaming-revenue-up-21_-in-2023-as-regulator-claims-95_-channelizationThe Dutch Gambling Authority (Kansspelautoriteit or KSA) has reported significant growth in the regulated gambling market, with the market’s gross gaming revenue (GGR) increasing by 21.2% in 2023, reaching €4 billion. However, the KSA has also raised concerns regarding the country’s channelisation rate, which measures the proportion of gambling activity conducted through legal operators. While some estimates put the rate as high as 95%, other data suggests it may be closer to 87% due to higher player spend on illegal sites.

Conflicting Channelisation Data

Two new reports released by the KSA on October 10, 2024, provide detailed insights into the current state of the Dutch gambling market. The Autumn 2024 Monitoring Report, which relies on data from research firms GfK and H2 Capital, estimates that the channelisation rate ranges between 87% and 95%, surpassing the initial target of 80% set in 2021.

According to GfK data, 95% of players only visited legal gambling sites during the first half of 2024. However, a second analysis, which considers revenue and player spend across both legal and illegal platforms, suggests the channelisation rate is closer to 87%. This method accounts for the fact that players tend to wager and lose more money on illegal gambling sites, which remain attractive due to the lack of regulatory oversight.

KSA Chairman Michel Groothuizen commented on the findings, saying, “The stricter we regulate, the greater that difference can become.” He added that while the 95% channelisation rate is commendable, the issue of illegal gambling remains a concern as it often involves higher player spending.

Market Growth and Player Behaviour

The KSA’s Market Scan 2024 report shows that the Dutch gambling market has continued to expand, particularly in the online casino sector. Online casino games, including table games and slots, accounted for 27.25% of the total GGR in 2023, generating €1.09 billion. This represents a 34% year-on-year increase compared to 2022. Land-based casinos, while recovering, have not yet reached pre-pandemic levels, with a 19% growth to €250 million in 2023.

Player spending in the Netherlands remains below the European average. Dutch adults spent an average of €272 per capita on gambling in 2023, compared to the EU average of €339. The Netherlands ranks just above Ireland but behind countries like Finland, France, and Denmark in terms of gambling expenditure.

Despite concerns about channelisation, data from the first half of 2024 indicates continued growth in the legal market. The GGR for the first six months of 2024 reached €752 million, an 8% increase from the second half of 2023. This growth was partly driven by an increase in sports betting during major events like the European Championship.

Sports Betting and Other Sectors

Sports betting remains a relatively small portion of the Dutch gambling market, contributing only 9% to the total GGR. Despite this, revenue from sports betting has more than tripled since the legalization of online gambling in 2021. The majority of sports betting revenue—83%—comes from online platforms, with land-based betting accounting for only 17%, largely controlled by Dutch monopolies like Zeturf and TOTO Winkel.

Lotteries continue to hold a significant share of the Dutch gambling market, maintaining a 30% market share in 2023, down slightly from 34% in 2022. This sector is entirely land-based, with no legal online lottery options currently available.

Future Outlook and Tax Concerns

Looking ahead, the Dutch gambling market is expected to face increased challenges due to a forthcoming tax hike. In January 2026, the gambling tax rate will rise from 30.5% to 37.8% of GGR, a move that has sparked concern and opposition within the industry. Although the government plans to introduce the tax increase gradually, operators fear that the higher tax burden could drive more players to unregulated, illegal platforms.

In 2023, Dutch gambling operators paid €117 million in taxes, alongside €698 million in charitable contributions. KSA Chairman Michel Groothuizen emphasized that the KSA will continue to monitor the effects of policy changes, including the impact of the tax hike, through future reports. He expressed curiosity about the upcoming findings in the next monitoring report due in spring 2025, which will further inform regulatory decisions.

Source:

“State of affairs of the Dutch gambling market 2023-2024“, kansspelautoriteit.nl, October 10, 2024.

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Indiana Gaming Commission Raises Concerns Over NeoGames 2020 License Application

The Indiana Gaming Commission (IGC) pulled from its meeting Thursday a decision to act on a vendor’s license application that has been in review for nearly three years. However, that move appears to be the last time the application for NeoGames will get extended.

An aerial shot of the Indiana State House in Indianapolis. The Indiana Gaming Commission on Thursday delayed taking action on the license application for NeoGames, a vendor that applied for its license in September 2020. IGC officials said there are concerns about one of the owners of the company. (Image: Massimo Catarinella/Wikimedia Commons)

NeoGames provides player account management (PAM) services in the state for Caesars Sportsbook. It applied for its Indiana license on June 8, 2020, according to IGC records. It received a temporary license three months later and has received two renewals of that temporary license.

IGC Executive Director Greg Small told commissioners that IGC staff has raised issues about its suitability for permanent licensure. In particular, the concerns regard a “substantial owner” of the company headquartered in Tel Aviv.

“Staff and applicant have been working to resolve these concerns, but I regret to inform the commission that we do not have a resolution at this time,” Small said.

The continued delay frustrated IGC Chairman Milton Thompson, who said the review seemed to be taking “abnormally long.” Other commissioners felt the same way.

This looks like a matter that we’ve been kicking the can down the road, or all parties have, and it’s time for everybody to show their hands,” Commissioner Michael Williams said.

Thompson called on the commission staff to provide “a definite plan of action” by the time it comes before the body in June.

Messages sent Thursday to NeoGames and Caesars seeking comment were not returned.

NeoGames Expanding in US

The partnership between NeoGames and Caesars dates back nearly five years. In October 2018, NeoGames reached a deal with William Hill to provide PAM services for the company’s online sportsbooks. Two years later, Caesars Entertainment announced its acquisition of William Hill. Last year, Caesars sold William Hill’s non-US assets to 888 Holdings.

When it purchased William Hill, Caesars acquired a 24.5% ownership share in the iGaming and iLottery services provider. It divested from that position by March 2022.

While NeoGames has not been able to complete its license application in Indiana, it has moved forward to expand its US operations. On Friday, NeoGames announced its iGaming content-providing subsidiary Pariplay agreed to provide games to the DraftKings online casino platform in New Jersey.

“Launching our content with them in New Jersey is a huge statement of intent for us regarding our plans for North America, and we very much look forward to developing this relationship,” NeoGames President Tsachi Maimon said.

NeoGames mentioned Pariplay also expects to provide content for DraftKings iGaming operations in Michigan and West Virginia, with the possibility for additional states pending regulatory approvals.

IGC Fines Ameristar, Horseshoe Casinos

Also at Thursday’s IGC meeting, commissioners approved disciplinary actions against 20 vendors, companies, casinos, and sports betting operators.

The two biggest fines were levied against Ameristar Chicago, which operates a casino in East Chicago. The IGC charged the Penn Entertainment Casino on five counts and fined $37,000. The most serious violation stemmed from a sportsbook supervisor accepting wagers from players via text messages without collecting payment.

Horseshoe Hammond agreed to a $34,000 fine covering five counts against it. The most serious charge was the Caesars casino laying off 16 individuals without first seeking IGC approval. The order stated the casino notified IGC about its intent to lay off workers. Commission staff responded that such a move would only be approved if casino leadership followed the routine procedure.

Last August, Horseshoe reported the positions to be eliminated, including a marketing director and an executive sous chef. However, by the time Horseshoe filed its report with the IGC, those positions were already eliminated and the workers in those roles were let go.

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