Portugal’s Regulatory Crackdown on Polymarket: A Wake-Up Call for Crypto Prediction Markets
Portugal’s gambling regulator, the Gambling Regulatory and Inspection Service (SRIJ), has banned crypto prediction platform Polymarket due to suspicious trading patterns during the country’s presidential election. The platform was found to have violated national laws banning political betting, with over €4 million wagered in just two hours before the results were announced.
The controversy surrounds suspicious shifts in betting odds that occurred as polls began circulating privately, raising serious questions about information leaks and insider trading in prediction markets. According to reports from the Portuguese newspaper Renascença, António José Seguro’s odds had risen to 96% by 6 p.m., a full hour before polls closed, and reached 100% when official forecasts confirmed his victory.
Suspicious Betting Patterns Trigger Investigation
The timing of the betting patterns proved even more suspicious in markets predicting the Republic’s next president. At 6:30 p.m., Seguro’s chances of reaching Belém Palace rose from 68.6% to 93.2% in an hour. Over the same period, Cotrim de Figueiredo’s chances fell from 22% to just 2.5%, settling at 95% for Seguro at 8 p.m., when Portuguese voters first learned of the results.
Between 6:00 p.m. and 8:00 p.m., the crucial window between the increase in Seguro odds and the announcement of public results, over 5 million euros were traded on various markets. A trader who knew more than the rest turned $576 into $2,300 in an hour on Polymarket, raising concerns about insider trading.
Regulatory and Compliance Measures in Portugal
The SRIJ confirmed that it had only “recently” become aware of Polymarket and considers the company’s activities to be “illegal”. According to Renascença, the regulator explained that “the website is not authorized to offer betting in Portugal and, under national law, betting on political events or events, whether national or international, is not permitted.”
Polymarket received notice on Friday to suspend its Portuguese operations within 48 hours. As of Monday, the website remained active, prompting SRIJ to notify network services about blocking the platform. Portugal joins a growing list of countries restricting the platform, including Ukraine, Singapore, and France.
Kalshi Challenges Polymarket’s Dominance in Prediction Market
KYC requirements vary greatly between established forecasting platforms. Kalshi enforces identity verification as part of its regulated model under the supervision of the US Commodity Futures Trading Commission (CFTC) and leads regulated exchanges such as Coinbase in developing prediction market websites that operate under Kalshi’s government-approved framework.
Although Polymarket is also legally recognized by the CFTC, access and permitted markets differ significantly, and legal questions remain over whether the platform offers contract trading or gambling under a different name. Amid regulatory hurdles and Kalshi lawsuits, Polymarket volume breakdown showed a 28% increase in political bets in December 2025, with stakes topping $4.3 billion, compared to $5.96 billion at Kalshi in the same period.
Source: Messari
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