Kalshi, Hyperliquid Defy Dutch Ban as Polymarket Exit Raises Stakes

Jessie A Ellis May 05, 2026 13:07

Kalshi and Hyperliquid continue serving Dutch users despite Polymarket's February ban, highlighting regulatory gaps in Europe's crackdown on crypto prediction markets.

Despite the Dutch Gaming Authority's (Ksa) February ban on Polymarket, platforms like Kalshi, Hyperliquid, and Interactive Brokers are still offering prediction market services to Dutch users. This regulatory gap has raised eyebrows as Europe intensifies its crackdown on unlicensed crypto prediction markets.

The Ksa barred Polymarket earlier this year for operating without a gambling license, categorizing its prediction markets as illegal gambling under Dutch law. The regulator warned that similar platforms could face sanctions, yet Kalshi and Hyperliquid remain active in the market. According to Dutch financial outlet FD, Kalshi even offers bets on Dutch Eredivisie football matches, while Hyperliquid has expanded its decentralized prediction market offerings in the Netherlands.

Interactive Brokers, meanwhile, claims its products are financial contracts, not gambling. It cites oversight by the Irish central bank, though the bank reportedly denies knowledge of such an arrangement. The regulatory ambiguity underscores the difficulty in policing cross-border platforms.

Why This Matters

The ongoing activity of these platforms highlights a broader issue: European regulators are struggling to enforce prediction market bans effectively. While the Ksa imposed strict penalties on Polymarket—including weekly fines of €420,000 for non-compliance—other platforms have avoided similar enforcement actions. This inconsistency could undermine the intent of regulations designed to protect consumers and prevent gambling-related harm.

Globally, prediction markets are under growing scrutiny. In Brazil, authorities shut down 27 platforms, including Kalshi and Polymarket, in March. In the U.S., the Commodity Futures Trading Commission (CFTC) is locked in legal battles with multiple states over jurisdictional authority, highlighting the fragmented regulatory landscape.

The Dutch Crackdown

The Netherlands' strict approach stems from concerns over societal risks, such as election manipulation. During the October 2025 elections, Dutch users reportedly wagered over $32 million on Polymarket, alarming regulators who feared potential democratic interference. The Ksa's ban reflects a broader European trend, with countries like France, Italy, and Switzerland taking similar measures against unauthorized platforms.

However, enforcement remains a challenge. Platforms like Kalshi and Hyperliquid leverage decentralized technology or legal gray areas to continue operations, raising questions about how effectively regulators can address these loopholes.

Investor Implications

For traders, the regulatory uncertainty adds risk to participating in these markets. Research from the London Business School found that nearly 70% of prediction market participants lose money, with only 3% making consistent profits. Insider trading concerns further complicate the picture, as anonymous traders have been accused of using non-public information to profit from geopolitical events.

While platforms continue to offer lucrative opportunities for speculation, the increasing regulatory pressure—from fines to outright bans—could affect liquidity and market access, particularly in Europe.

Looking Ahead

The Ksa's ongoing enforcement efforts will likely intensify, potentially setting a precedent for other European regulators. Whether platforms like Kalshi and Hyperliquid can navigate these restrictions without legal consequences remains to be seen. For now, traders should monitor developments closely, as regulatory actions could significantly impact both market access and profitability in the coming months.

• prediction markets
• kalshi
• hyperliquid
• polymarket
• regulation