Portugal Bans Polymarket Over €4M Election Betting Scandal - Brave New Coin

The ban, announced on January 17, 2026, adds Portugal to a growing list of over 30 countries blocking the platform amid mounting concerns about insider trading.

The Election That Triggered the Ban

Portugal’s gambling regulator, the Serviço de Regulação e Inspeção de Jogos (SRIJ), took action after users wagered more than €103 million ($120 million) on the January 18 presidential election. What caught regulators’ attention was the timing and scale of bets placed just before results became public.

The betting patterns raised red flags. In the hours leading up to the announcement, odds for Socialist candidate António José Seguro shifted dramatically from around 60% in the morning to over 90% by early evening—well before official exit polls were released. Seguro ultimately won the first round with approximately 31% of votes and will face far-right candidate André Ventura in a February 8 runoff.

Source: @coinbureau

SRIJ officials stated that Polymarket operates without a license and allows political betting, which is strictly illegal in Portugal. Under the country’s 2015 online gambling law, only sports betting, casino games, and horse racing are permitted. Betting on political events—whether domestic or international—is banned.

A Pattern of Suspicious Trading

The Portugal incident is not isolated. Polymarket has faced multiple insider trading controversies in recent weeks that have intensified regulatory scrutiny worldwide.

The most dramatic case occurred on January 3, 2026, when an anonymous trader made over $400,000 by betting on Venezuelan President Nicolás Maduro’s removal from power. The trader placed bets worth $32,000 just hours before U.S. forces captured Maduro. Three digital wallets collectively profited over $630,000 from this event, according to blockchain analytics.

The timing seemed too perfect to be coincidence. The account that made the largest profit was created less than a week before the raid and only placed bets related to Maduro and Venezuela. This prompted U.S. Representative Ritchie Torres to introduce legislation banning federal employees from trading on prediction markets when they have non-public information.

Just days later, Polymarket correctly predicted 26 out of 27 Golden Globe Award winners—a 96% accuracy rate that raised more eyebrows. The platform had partnered with the awards show to display live betting odds during the broadcast. Critics questioned whether someone had insider access to voting results before they were announced publicly.

Europe Closes Its Doors

Portugal joins a wave of European countries blocking Polymarket. Hungary has already implemented a nationwide block, redirecting users to an official warning page. France and Switzerland banned the platform in late 2024. Poland, Belgium, Italy, and Germany followed with their own restrictions in early 2025.

Most recently, Ukraine added Polymarket to its national ban registry in December 2025, specifically criticizing the platform for allowing bets on outcomes related to the Russian invasion. Romania blacklisted the service in November after discovering over $600 million in transactions during the country’s elections.

The pattern is clear: European regulators view Polymarket as unlicensed gambling, not a legitimate information market. Portugal’s National Office for Gambling explained that “whether you bet in lei or crypto, if you bet money on a future outcome, under the conditions of a counterparty bet, we are talking about gambling that must be licensed.”

The Regulatory Divide

While Europe is cracking down, Polymarket recently secured approval to return to U.S. markets after a three-year ban. The platform purchased a CFTC-licensed exchange for $112 million in July 2025 and received regulatory clearance in November 2025.

However, this federal approval hasn’t stopped state-level challenges. Tennessee ordered Polymarket, along with competitors Kalshi and Crypto.com, to halt sports betting contracts on January 9, 2026. Connecticut issued similar orders in December 2025, though a federal judge temporarily blocked enforcement.

The central legal question is whether federal commodities regulation overrides state gambling laws. With cases scheduled for February 2026, the courts will soon decide if prediction markets can operate under one set of federal rules or must comply with 50 different state laws.

What Happens Next

For Portuguese users, the ban creates immediate problems. SRIJ warned that once the platform is blocked, users may not be able to recover their funds. Only licensed operators provide consumer protections, and Polymarket has no such license in Portugal.

The platform remained accessible on Monday, January 20, but regulators are preparing to order internet service providers to block access. Users attempting to bypass restrictions with VPNs would violate Polymarket’s terms of service and risk account closure.

The broader implications extend beyond Portugal. A Columbia University study published in November 2024 found that approximately 25% of Polymarket’s trading volume came from wash trading—when traders buy and sell to themselves to create fake activity. During high-stakes events like elections, that figure reportedly spiked to 60%.

Polymarket’s CEO Shayne Coplan has defended the platform, arguing it provides “clarity where there is confusion.” The company reached an $8-9 billion valuation in October 2025 after receiving investment from Intercontinental Exchange, which owns the New York Stock Exchange. The platform processed over $18.1 billion in trading volume throughout 2025.

The Crossroads of Innovation and Regulation

Portugal’s ban highlights the fundamental tension around prediction markets. Are they innovative forecasting tools that aggregate information through financial incentives? Or are they simply unlicensed gambling platforms dressed up with blockchain technology?

With 34 countries now blocking access and legislative battles intensifying in the United States, Polymarket faces a critical test. The platform must prove it can operate within regulatory frameworks while maintaining the features that drove its explosive growth. For now, the walls are closing in from multiple directions, and the path forward remains uncertain.

Portuguese regulators have made their position clear: political betting is illegal, regardless of the technology used. As more countries reach similar conclusions, the prediction market industry must adapt or risk becoming inaccessible to most of the world.