Polymarket faces ban in France as US election betting ends

According to a report from The Big Well, France's gambling regulator, the National Gaming Authority (ANJ), is preparing to ban prediction markets platform Polymarket.

Polymarket, a decentralized platform that allows users to bet on the outcome of political events, sports and other events using cryptocurrency, has gained popularity in recent months, especially with bets around the US presidential election. During this high-stakes season, more than $3.2 billion was reportedly wagered on the platform, breaking a record of $294 million on November 5 alone.

French users can no longer access Polymarket

According to French website The Big Well, Crypto Industry reported that ANJ's ban came after a French trader placed a $30 million bet on Trump's victory, which allegedly caught the regulator's attention.

The trader's bets put him at a profit of nearly $19 million, a sum that raised concerns about Polymarket's compliance with French gambling laws. According to a source close to ANJ, Polymarket uses blockchain and cryptocurrency, but its activities are similar to gambling, leading to restrictions under French law.

“We are aware of this site and are currently investigating its operations and compliance with French gambling laws,” The Big Well quoted an ANJ spokesperson as saying.

Read more: What is Polymarket? A guide to the popular prediction market

Lawyer William O'Rourke from ORWL Advocates explained that although Polymarket does not specifically target French users, its activities are subject to gambling regulations.

“Polymarket involves betting money on uncertain outcomes, which fits the legal definition of gambling,” O'Rourke said.

Against this background, the ANJ is empowered to deny access to the forum in France. Accordingly, the French regulator can enforce the ban by blocking the Polymarket name in France. Ami has pressured third-party players such as media outlets and online directories to restrict access to Polymarket links.

However, French users can still bypass it by using virtual private networks (VPNs). Because Polymarket's crypto-based infrastructure allows relatively anonymous participation.

The French ban is not the first form of regulation Polymarket has faced. In the year In 2022, the US Commodity Futures Trading Commission (CFCC) fined Polymarket $1.4 million for not registering as a preferred contract market. The CFTC investigated Kalshi's operations due to questions about political betting.

The fate of Polymarket after the US election

Meanwhile, the US election was a big boost for Polymarket. It took the platform to new heights in terms of user engagement and betting volume. Polymarket's options-linked markets have been featured on major financial platforms, including Bloomberg, highlighting the platform's interest in mainstream finance.

As reported by BeInCrypto, Polymarket's option betting has topped $3 billion, an unprecedented turnout. The platform, however, encounters a crossroads on the road ahead. Following the conclusion of the US election on Wednesday, data from Dune Analytics showed a sharp decline in Polymarket activity.

Daily active addresses and transaction volumes, which had risen in the lead-up to the election, have declined, particularly as election-related betting has declined. For example, Polymarket's open interest, a key indicator of active betting participation, dropped from $350 million to $268 million after the election closed. Likewise, monthly new accounts fell more than 41% between October and November.

Against this background, Polymarket may need to diversify its market offerings or adopt a new model to meet consumer demand. This election-related activity makes up the bulk of the forecast market.

Rumors are swirling that it may move towards a decentralized governance token, which could be distributed to the community to control the operations of Polymarket. While this shift theoretically continues to decentralize decision-making, it also reduces the accountability of the central authority.

Read more: How to use Polymarket in the United States: A step-by-step guide

Polymarket's rapid take-off and regulatory challenges reveal a wider industry tension between innovation and compliance. Polymarket's future is uncertain amid election predictions and a possible ban in France.

Its long-term viability may depend on how well it fits into the evolving regulatory landscape and whether it can maintain high popularity beyond election season.