Polymarket has come up against another ban as regulators continue to view its product as blurring the lines between trading and betting, though now that the firm has re-secured entry to the US it may not be overly concerned.

The Colombian betting and gaming regulator, Coljuegos, has banned the company, claiming that by offering predictions markets on politics it has violated the country’s betting laws, which explicitly prohibit wagering on elections.

On top of this, Coljuegos states that Polymarket has been offering predictions, money collection and what it calls ‘cryptocurrency bets’ without its authorisation – effectively stating that it views Polymarket as a betting platform and not a financial services one. Colombian internet service providers have been requested to block Polymarket as a result.

Marco Emilio Hincapié, President of Coljuegos, said: “We want to inform Colombians that this website is illegal and does not have the necessary permits to operate online gaming in Colombia.

“Therefore, we have requested that the site be blocked and have opened an investigation into those responsible for this illegal activity. We remind citizens that the exploitation of games of chance is a state-funded monopoly, and that any type of betting requires authorization from Coljuegos.”

Polymarket’s troubled past and valuable future

This is hardly Polymarket’s first brush with regulators. The predictions market was founded in 2020 as a decentralised market based on the Polygon chain and using the US dollar-pegged USDC stablecoin, with markets covering politics, sports and entertainment.

However, it quickly found itself at loggerheads with the Commodity Futures Trading Commission (CFTC), the regulator of futures trading in the US.

A settlement with the regulator in 2022 led to the firm blocking all US customers, though it has still found itself coming under law enforcement scrutiny, such as after the 2024 presidential election.

Outside the US, it has also been blocked in France, Singapore and Belgium, where regulators considered its activities to constitute betting, while it also received a warning in Germany recently.

The times have been a chagrin’ in the US of late, however, with the CFTC taking a step back from regulating prediction markets under Donald Trump. Kalshi, which also found itself at loggerheads with the CFTC, has emerged as a clear market leader, though it continues to face litigation from various state regulators.

Against this backdrop, Polymarket has secured re-entry back into the US. The company acquired CFTC-registered derivatives exchange QCX LLC in July, and subsequently rebranded the firm to Polymarket US.

With the firm now back in its founding market, and by far the most valuable for prediction markets globally, it may not be overly concerned with being banned in Colombia. At least from a financial perspective, prospective US revenue will more than make up for this.

However, the Colombian development shows that regulators are still unconvinced by the prediction markets model and believe that its parallels to conventional betting are far more obvious.

Additionally, regulators like Coljuegos may have protectionism in mind. Colombia possesses one of Latin America’s oldest and high-value regulated betting markets, having been launched in 2016 and home to 14 firms, both local and international.

Coljuegos may not be keen on prediction markets potentially taking revenue away from this high-value sector.

“Our goal is to defend the legal industry, which this year has already contributed $256.746 billion for subsidized healthcare, and nearly $783bn in VAT,” Hincapié said.