On January 20, 2026, at 8:00 AM UTC+8, the Portuguese gambling regulatory authority SRIJ suddenly intervened, ordering the blockchain prediction market platform Polymarket to cease operations in Portugal within 48 hours. This ban is particularly striking not only because of the strong regulatory language but also because, prior to this, contracts related to the January 18 Portuguese presidential election results had accumulated a total betting amount exceeding €103 million, creating a rare political "betting spectacle" in an EU member state known for its strict gambling regulations. With the order issued, the on-chain prediction market collided head-on with offline regulatory red lines: on one side is a decentralized financial experiment claiming to be an information aggregation tool, and on the other is a traditional gambling system maintaining a high-pressure stance in politically sensitive areas. The outcome of this game will affect more than just the fate of one platform.

€100 Million Presidential Betting: The Portuguese Election on the On-Chain Betting Table

Polymarket is essentially a prediction market platform built on blockchain, where users can create and trade contracts around various "real-world events," from election results and macroeconomic indicators to technology product launches and sports event outcomes, all of which can be broken down into tradable "yes/no" contracts. Participants connect their wallets to purchase shares of a particular outcome on-chain, and once the event occurs, the contract corresponding to the final result will be paid out, while the losing side will lose their principal. Designed as a tool to "express probabilities and opinions through prices," these markets are seen by supporters as a distributed information aggregation mechanism superior to polls.

Within this framework, the January 18, 2026 Portuguese presidential election became the focal point for Polymarket. Contracts related to the election results attracted a massive influx of funds in a short period; according to public data, the betting amount for this market has already exceeded €103 million, far surpassing the traditional scale of regional political events. For local Portuguese users, the presidential election already stirs social emotions, and now being brought to the on-chain exchange, the fluctuations in election sentiment are instantaneously amplified in price curves; for global users, this is seen as yet another "tradable political event," with funds converging from around the world into the same set of smart contracts, expressing positions through prices and betting on judgments.

The rhythm of participation in this scenario sharply contrasts with traditional sports betting or casino chips. Sports betting is often viewed by the public as an extension of "entertainment + luck," while casinos are confined to specific physical spaces and licensing frameworks, framed by public opinion as high-risk consumption. However, breaking down a significant political outcome like "Who will be the next president?" into tradable bets makes it difficult for voters, candidates, or institutions to simply regard it as a form of entertainment. Betting on political events in the globally open context of on-chain markets rapidly amplifies, not only presenting the originally abstract "public opinion and expectations" in a direct price form but also blurring the boundaries between gambling, finance, and democratic politics overnight.

Regulatory Red Line Triggered: SRIJ Must Show Its Bottom Line

When the amount of the Polymarket presidential market surpassed €103 million, it was clear that the Portuguese regulators' tolerance had been pushed to the limit. The Portuguese gambling regulatory authority SRIJ subsequently made it clear that "Portuguese law explicitly prohibits betting on the outcomes of political and other real-world events," and based on this, demanded that the platform cease operations in the country within 48 hours. Rather than being a sudden enforcement action against a specific platform, it is more of an instinctive reaction of the existing legal framework when confronted with new technology.

Under the current system in Portugal, the law only allows limited forms of gambling activities such as sports, casino games, and horse racing, which must be incorporated into a strict licensing and auditing system. From the perspective of lawmakers, gambling is a highly fenced-off high-risk industry, with the permissible scope, scenarios, and types of operators clearly outlined in legal texts. Political events are placed in another quadrant: they concern electoral fairness, public order, and social trust, and are considered to be as far removed from money-driven manipulation as possible. Therefore, when a decentralized platform directly transforms "real-world events," especially election results, into contracts that can be bet on and circulated, the regulatory response is not to consider its information efficiency advantages but to classify it as typical "unauthorized gambling."

This classification is based on a comprehensive consideration of multiple risks. Betting on political events theoretically could provoke doubts about electoral fairness: if the betting amounts surrounding a particular candidate are enormous, public opinion may be swayed by price signals, leading to self-reinforcing emotional fluctuations; in extreme cases, relevant stakeholders may even have motives to manipulate information or behavior to drive market prices and influence social expectations. Additionally, the rapid circulation of large amounts of money in prediction markets naturally intertwines with regulatory-sensitive issues such as money laundering and cross-border capital flows. For a cautious EU member state, these potential consequences are enough to overshadow the imaginative space for "financial innovation tools," leading regulators to prefer categorizing Polymarket alongside traditional gambling rather than viewing it as a new type of financial infrastructure that requires a specialized sandbox.

Decentralization Meets Regulatory Wall: Polymarket's Structural Dilemma

The SRIJ's ban has once again brought an old issue to the forefront: how to reconcile conflicts when decentralized, globally accessible blockchain platforms encounter regulatory powers delineated by national borders. Polymarket's technology and business logic are built on the composability of on-chain contracts and the borderless flow of the internet; users can participate in any public market as long as they hold a compatible wallet and can access the front-end interface. In contrast, the power boundaries of the Portuguese regulatory authority are confined to its national judicial jurisdiction, restricting service providers and users "operating in the country" through legal and administrative orders.

In such conflict scenarios, the regulatory toolbox is usually not complex, including ISP-level access restrictions on specific websites or applications, as well as exerting pressure on relevant parties with local touchpoints to take down operations or comply with regulations. For platforms like Polymarket that operate on a blockchain basis, how to respond to enforcement requirements from specific jurisdictions without abandoning the narrative of "openness and decentralization" becomes a genuinely tricky issue. On one end is regional lockdown and user filtering at the cost of compliance, while on the other end is the insistence on the technical ideal of "anyone can access," which risks being seen as a regulatory adversary.

This tension is not unique to Polymarket but is a structural dilemma faced by the entire DeFi and prediction market sector. As compliance requirements rise in various countries, tools such as KYC mechanisms, business license applications, geographic restrictions, and blacklist integration are increasingly appearing on the design checklist of decentralized applications. Platforms need to repeatedly weigh front-end access restrictions, abstract design at the contract layer, and compliance costs; users, when facing regional restrictions, must reassess their choices between privacy, convenience, and compliance risks. Portugal's recent action against Polymarket reflects a concentrated outbreak of this macro contradiction in the most sensitive category of political prediction, and how the project team finds a compromise path without diluting its commitment to decentralization remains an open question.

Global Regulatory Echo: How Far Can Prediction Markets Go?

Placing the Portuguese incident back into a global context reveals a clearer trend outline: the regulatory attitude towards prediction markets and gambling-related crypto products is shifting from early "observation and tolerance" to a more proactive and cautious direction. Different jurisdictions do not have a unified stance in defining such products; some emphasize their financial derivative and risk management attributes, while others directly categorize them as online gambling or illegal betting for regulation. However, overall, when "betting on real-world events" overlaps with "on-chain programmable capital flows," regulatory focus often quickly shifts to traditional issues such as consumer protection, financial crime, and social stability.

In this context, attitudes towards betting on political events are likely to further diverge. On one end are models like Portugal's, which use "explicit prohibition" as a bottom line, completely excluding elections and public policy decisions from the betting scope; on the other end, there may be more lenient jurisdictions that allow certain political prediction products to exist in compliance through licensing systems, limits on amounts, or time window management. In the middle ground, there are still many jurisdictions that have not provided clear definitions for prediction markets, leaving a gray area between regulation and industry practice that allows for future policy oscillation.

For platforms like Polymarket, such regulatory shocks not only represent a geographical market contraction but may also compel them to make adjustments at the product design level. Whether to impose restrictions on political markets within a globally unified product matrix, whether to introduce more refined regional access controls, and whether to proactively package certain event contracts into more "financialized" formats to avoid traditional gambling red lines will all become pressing issues. Meanwhile, the long-term game between regulatory regulation, technical evasion, and user migration is quietly unfolding: once certain jurisdictions impose strict blockades, technically savvy users may turn to other regions or more "natively decentralized" platforms through various means, potentially shifting or diffusing regulatory pressure to new ecological corners. In the foreseeable future, this dynamic of "tightening rules—technical circumvention—user migration" will continue to shape the global landscape of prediction markets.

Political Chips and On-Chain Betting: What’s Next?

The ban issued by Portugal against Polymarket has brought the high sensitivity of betting on political events into the spotlight. The €103 million scale of the presidential election market was not seen as a demonstration of "on-chain financial vitality," but rather triggered alarms from regulators regarding electoral fairness, public order, and financial risks. This event clearly reminds the market: when political outcomes are directly transformed into tradable bets, even if the technical shell is decentralized, in the eyes of many jurisdictions, it is still primarily a gambling activity that needs to be regulated or even prohibited.

At the same time, the potential value of prediction markets in price discovery and information aggregation has not disappeared as a result. Supporters continue to emphasize that compared to survey polls or expert opinions, the prices formed by real money betting better reflect participants' comprehensive judgments and information advantages about the future; however, this value is closely intertwined with its gambling attributes—markets that are more liquid and incentivized are more likely to slide towards the "gambling" side in the eyes of regulators. How to reduce the negative spillover effects on society and politics without losing information efficiency becomes the fundamental tension that prediction markets must address.

From a longer-term perspective, the evolutionary path of prediction markets can roughly be divided into three trajectories. The first is compliance sandboxing, where in a few jurisdictions willing to experiment, they are incorporated into regulatory pilot frameworks, exploring institutional landing under controlled risk through strict limits, event type access, and participant thresholds. The second is product restraint, where platforms actively eliminate or compress the most sensitive political markets, shifting focus to economic indicators, corporate events, or verifiable data-driven predictions to weaken direct conflicts with traditional gambling and public governance. The third is more thorough decentralization, further separating front-end control, compliance interfaces, and core contracts, allowing prediction markets to exist in forms that are harder to be directly constrained by a single jurisdiction, but correspondingly, they also need to bear higher uncertainty and regulatory confrontation risks. Portugal's recent regulatory raid may just be a strong reminder before these three paths diverge: the struggle between technology and institutions has only just begun.

Join our community to discuss and grow stronger together!
Official Telegram community: https://t.me/aicoincn
AiCoin Chinese Twitter: https://x.com/AiCoinzh

OKX Benefits Group: https://aicoin.com/link/chat?cid=l61eM4owQ
Binance Benefits Group: https://aicoin.com/link/chat?cid=ynr7d1P6Z

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。