The National Gaming Authority (ANJ), France’s primary gambling regulator, is preparing to ban Polymarket, a popular decentralized prediction market that allows users to bet on events like elections, sports, and other outcomes using cryptocurrency.
Polymarket saw rapid growth this year, particularly during the U.S. presidential election, when users wagered over $3.2 billion. On November 5 alone, the platform saw record-breaking volumes of $294 million.
France’s Ban on Polymarket: Why It’s Happening
According to The Big Whale, a French crypto news outlet, ANJ’s move follows a high-profile $30 million bet by a French trader on a Trump victory, prompting concern over compliance with local gambling laws. French law identifies any betting on uncertain outcomes as gambling, and, despite Polymarket’s crypto base, ANJ considers it subject to regulation. The ANJ could enforce the ban by blocking Polymarket’s domain in France or urging third parties, like media sites, to restrict access to Polymarket links. However, users may bypass these restrictions using virtual private networks (VPNs), which can mask locations and access global websites.
Polymarket’s Regulatory Hurdles in the U.S. and France
This isn’t Polymarket’s first run-in with regulators. In 2022, the U.S. Commodity Futures Trading Commission (CFTC) fined the platform $1.4 million for operating without proper registration. The CFTC also scrutinized similar betting platforms, indicating the challenges crypto betting platforms face internationally.
What’s Next for Polymarket After the U.S. Election?
While the recent election fueled Polymarket’s record engagement, the platform’s activity has since slowed. Data shows that transaction volumes and daily active addresses dropped sharply following the election. Open interest, a measure of active user engagement, fell from $350 million to $268 million. Monthly new accounts have also declined by over 41% from October to November.
To adapt, Polymarket may explore new markets beyond politics or consider a decentralized governance token model, which would hand over some platform control to its community. Decentralization could reduce central authority liability, although no official timeline for this shift has been set.
Polymarket’s Future in a Changing Regulatory Landscape
Polymarket’s rapid rise highlights the tension between regulatory frameworks and crypto innovation. With election season winding down and an impending ban in France, the platform faces an uncertain future. Its long-term success may depend on adapting to regulations and attracting users year-round, not just during election cycles.
