Romania's National Office for Gambling Blacklists Polymarket, Citing Unlicensed Crypto-Based Betting

The Blacklisting of Polymarket by ONJN

The National Office for Gambling in Romania (ONJN) has recently blacklisted Polymarket, a leading prediction market. The ONJN calls Polymarket an unlicensed gambling platform that operates without state oversight.

An Increase in Crypto-Based Betting

This decision by the ONJN follows what the regulator described as a significant increase in crypto-based betting during Romania’s recent presidential and local elections. The trading volume on Polymarket during this period reportedly exceeded $600 million.

The Nature of Polymarket’s Activity

The ONJN pointed out that the activities on Polymarket are examples of counterpart betting. This model allows users to wager money against each other based on the predicted outcomes of future events. Despite the platform using a blockchain-based format, such activity is subject to gambling laws.

The Stance of the ONJN President

Vlad-Cristian Soare, President of ONJN, emphasized that the blacklisting of Polymarket is not about the platform’s use of blockchain technology. Instead, the main concern is the aspect of legality. He stated that regardless of whether bets are placed using Romanian leu or cryptocurrency, such activities qualify as gambling and should be subject to licensing.

Identified Violations

Several violations have been cited by authorities, such as lack of fiscal reporting, absence of player protection mechanisms, and insufficient Anti-Money Laundering (AML) oversight. Polymarket, which brands itself as an event trading platform, allows users to bet money on uncertain outcomes while taking a commission. According to ONJN, this structure satisfies all legal definitions of gambling. As a result, Romanian internet providers are now obliged to block access to the site.

Similar Cases Globally

Comparable actions towards Polymarket have been taken globally. In 2022, the United States Commodity Futures Trading Commission (CFTC) imposed a fine on Polymarket for operating unregistered derivatives markets. This led to the platform blocking American users. Additionally, regulators from Belgium, France, Poland, Singapore, and Thailand have executed restrictions on Polymarket access.

Continued Growth Amidst Challenges

Despite these regulatory challenges, Polymarket has continued to experience growth. Notably, the platform recently secured a $2 billion investment from Intercontinental Exchange, the parent company of the New York Stock Exchange.

Planned Resumption of U.S. Trading

Polymarket is reportedly preparing to resume its trading activities in the United States within weeks. The platform plans to initially focus on sports-related markets. According to an anonymous source, Polymarket aims to restart limited trading for US users before the end of November.

The Future of Polymarket

This move by Polymarket follows a recent development involving the CFTC. The regulatory entity provided a no-action letter to a crypto derivatives exchange recently purchased by Polymarket. This effectively clears the way for the platform to resume operations in the U.S. Despite the blacklisting and various challenges, there are signs that Polymarket is beginning to adapt to regulatory expectations and continuously seeks ways to maintain its operations.

Romania’s National Office for Gambling Blacklists Polymarket, Citing Unlicensed Crypto-Based Betting