France’s gambling regulator, the Autorité nationale des jeux (ANJ), is scrutinizing the cryptocurrency prediction market Polymarket, which has become a focal point due to its heightened activity around the 2024 U.S. presidential election.
According to a report by Bloomberg on November 7, the National Gaming Authority of France is actively investigating how Polymarket operates and whether it adheres to French gambling laws. An ANJ spokesperson told Cointelegraph, “We are familiar with this site and are currently examining its operation and its compliance with French legislation on gambling.”
Polymarket’s Influence and Operation
Polymarket, established in 2020, is a decentralized platform allowing users to wager on the outcomes of real-world events using cryptocurrencies. The platform, though based in New York, restricts access from U.S. residents but remains available to users in other parts of the world, including France.
During the U.S. election season, Polymarket saw a surge in activity, with bets totaling $2.5 billion in October alone, per Dune Analytics data. One notable user, known pseudonymously as Fredi9999, reportedly placed over $20 million in bets favoring Donald Trump, potentially earning close to $50 million across multiple accounts.
Despite its international user base, Polymarket’s use of cryptocurrencies does not exempt it from adhering to local gambling regulations in France. A source close to the ANJ clarified to Bloomberg, “Even if Polymarket uses cryptocurrencies in its operations, it remains a betting activity, and this is not legal in France.”
William O’Rorke, a partner at ORWL Avocats, highlighted that Polymarket’s model fits squarely within the definition of gambling. He explained, “Polymarket consists of betting money on something random, and that’s strictly the definition of gambling, so it is like a sports bet.”
The ANJ has the authority to block access to platforms like Polymarket, even if they do not directly target French users. This stems from their mandate to oversee and regulate gambling activities within the country.
Interestingly, Polymarket not only serves as a betting platform but has also influenced political insights. Polymarket’s CEO, Shayne Coplan, mentioned that Donald Trump’s campaign team utilized the platform’s data, stating, “Trump’s campaign team literally found out they were winning from Polymarket.”
Considering the Consequences of Regulation
As the ANJ considers a ban on Polymarket, the broader implications for cryptocurrency-based betting platforms come into focus. France’s cautious stance reflects a larger trend of regulatory bodies seeking to understand and control how digital assets intersect with traditional financial activities like gambling. The case of Polymarket serves as a pivotal example of how innovative platforms can clash with national regulations, highlighting the need for a balanced approach that protects consumers while fostering technological advancements. This scenario underscores the ongoing challenges faced by crypto platforms as they navigate varied legal landscapes, emphasizing the importance of compliance and the potential consequences of regulatory actions.
