Polymarket blocked across Europe as Lithuania joins enforcement wave

Jason Giles left the CFTC's Washington headquarters on Monday with nothing he could use. A dozen tribal leaders had traveled to meet Michael Selig, the agency's sole commissioner, expecting to discuss the proposed rulemaking on event contracts. Selig's staff told them they couldn't talk about the rule. The comment period had already closed. Giles said afterward that he didn't know what law prevented the discussion.

That meeting, and the week's other developments, point toward the same place: the jurisdictions that want prediction markets stopped are not waiting for federal clarity that is not coming.

Lithuania's gambling regulator moved against Polymarket on September 18, ordering internet service providers to block the platform and directing payment processors to cut off transactions. A regional administrative court had already approved the measure. The regulator's statement was precise about its reasoning: the investigation found "signs of gambling — betting" regardless of how Polymarket described its own product. Lithuania becomes the latest in a list that now includes Spain, the Netherlands, Italy, Germany, France, and Denmark. South Korea preceded them by weeks, and Seoul prosecutors have already received referrals.

This is not a coordinated campaign in any formal sense. There is no treaty body issuing guidance. What it looks like, from the outside, is a series of independent regulators reaching the same conclusion when they read the same product description. The prediction-versus-wagering distinction that carries legal weight in US federal courts carries very little weight anywhere else.

The conventional read on this European enforcement wave is that it's a market access problem — manageable, contained, priced into Polymarket's growth projections. I'm not sure that's where this lands.

The mechanism that has protected US-based prediction market platforms from state-level bans is federal preemption: the argument that CFTC-regulated event contracts cannot be blocked by state gambling law. That argument is weakening. The Ninth Circuit has already found, unanimously, that tribal claims under IGRA were valid enough to reverse a preliminary injunction ruling. Judge McKeown called Kalshi's contracts "an act of placing a bet or wager" — language that European regulators have now reached independently, without any coordination with American tribal governments.

Scott Crowell, who represents tribal interests, was direct about the CFTC's posture after Monday's meeting: "It's had no credibility since he was appointed." His reading of Selig's silence is that the rulemaking is now a fallback position, a Plan B after the CLARITY Act failed and the courts began cutting against the preemption argument.

I adjust for my own bias here. I weight tail risk by disposition, and Eleanor has been right that I sometimes see fragility in structures that are merely stressed. But the pattern that preceded the gilt crisis in 2022 — which I underpriced — was exactly this: multiple jurisdictions acting independently, each citing local law, creating a cumulative record that then arrived in court as evidence of consensus. I was too slow to weight that political convergence. I am not making the same error twice.