The French National Gambling Authority, also known as Autorite Nationale des Jeux, has announced that it is currently reviewing the operations of Polymarket, a cryptocurrency-based prediction market that recently experienced record betting volumes during the US presidential election. A spokesperson for the regulatory body stated, "We are aware of this site and are examining its operation and compliance with French gambling laws. We will provide an update on the outcome shortly." Reports suggest that the regulator may soon block access to the site, citing that even though Polymarket uses cryptocurrencies, its activities constitute betting, which is not permitted in France.
This development comes after a French individual, known as Theo, made substantial profits on the platform by correctly betting on Donald Trump's victory in the US election, despite initial polls indicating a close contest. According to reports, Theo is set to earn $50 million from his trades. Polymarket enables users to buy and sell shares representing potential future outcomes, with each share paying out $1 in the USDC stablecoin if the prediction is correct and zero if it is not. The platform, which is based in New York and inaccessible to Americans, relies on a global user base and has been blocking US IP addresses as part of a settlement with the Commodity Futures Trading Commission.
Proponents of prediction markets argue that they offer a more accurate forecasting method than traditional polls or expert opinions, as participants have a financial incentive to conduct thorough research and bet on the outcome they genuinely believe will occur. However, election betting is a contentious issue in many countries, including the US, where the CFTC is considering regulations to prohibit such activities on exchanges under its jurisdiction.