jili tutorial

Lithuania Blocks Polymarket: A Landmark Decision in the Regulation of Prediction Markets

By jili tutorial · September 18, 2026

Lithuania Blocks Polymarket: A Landmark Decision in the Regulation of Prediction Markets

Overview: What Happened and Why It Matters

Lithuania’s gambling authority, Lošimų priežiūros tarnyba (LPT), has ordered internet service providers and payment processors to block access to Polymarket, a leading prediction‑market platform. This marks the first time a prediction market has been specifically targeted by a Lithuanian regulator. The LPT concluded that Polymarket’s operations constitute illegal remote gambling—despite the platform’s assertion that it offers a “prediction market” where users trade on event outcomes.

The decision is not an isolated event. It reflects a growing global tension between innovative prediction‑market models and existing gambling laws. While Polymarket has already been restricted in several European and Asian jurisdictions, the Lithuanian ruling adds significant weight to the argument that such platforms fall under traditional gambling definitions.

Background: What Are Prediction Markets?

Prediction markets allow participants to buy and sell shares representing the probability of a future event (e.g., “Will Candidate X win the election?”). The market price of a share theoretically reflects the collective wisdom of the crowd. Unlike traditional betting, prediction markets often frame trades as “investments” or “forecasts.”

Key Features

Despite these differences, many regulators classify prediction markets as gambling because they involve staking money on uncertain outcomes and promise monetary rewards.

Lithuania’s Regulatory Action: A Detailed Breakdown

The LPT’s Investigation and Ruling

The LPT launched an investigation after receiving complaints and monitoring Polymarket’s activities. The regulator stated:

“Although the website stated that it provided the opportunity to participate in a ‘prediction market’… the investigation identified signs of gambling – betting.”

Key findings included:

The Regional Administrative Court of Lithuania issued a binding decision that:

As of the ruling, the LPT has blocked 2,204 illegal remote gambling websites in total, demonstrating a systematic effort to eliminate the black market.

Why This Matters for Polymarket

Unlike previous actions in other countries, Lithuania’s decision explicitly classifies prediction markets as gambling per se. This sets a legal precedent that could influence other regulators. The platform now faces a complete access ban within Lithuania, meaning Lithuanian users cannot even visit the site—let alone place trades.

Comparison with Other Jurisdictions: A Pattern of Restrictions

Polymarket is far from the first company to face regulatory pushback. The platform has been blocked or restricted in multiple countries:

CountryAction TakenReason
South KoreaBlocked access in September 2024 after a month‑long reviewViolation of gambling laws
FranceRestricted access under the national gambling authorityUnlicensed betting
Spain, Germany, Italy, NetherlandsVarious blocking ordersLack of permit / gambling classification
LithuaniaFull blocking + payment terminationIllegal remote gambling

Why Are Regulators Cracking Down?

Most countries define gambling as “stakes of value on an uncertain event with a chance to win a prize.” Prediction markets easily fall under this definition, especially when real money (or crypto) is used. Regulators also express concern about:

The European Landscape: Diminishing Hopes for Polymarket

Polymarket’s presence in Europe has been drastically reduced. Several of the continent’s largest economies—France, Germany, Italy, Spain, the Netherlands—have already moved to block or restrict the platform. The European Gaming and Betting Association (EGBA) has also been vocal about the need to channel betting activity into regulated markets.

Potential Exceptions: Gibraltar and the United Kingdom

The outlook is not entirely bleak for Polymarket. Two jurisdictions offer potential avenues:

However, Lithuania remains adamant. The LPT has no intention of reconsidering its decision, citing the clear absence of a local license.

Broader Context: Lithuania’s Crackdown on Illegal Gambling

The Polymarket ban is part of a wider campaign by the LPT to combat the black market. Recent estimates from the Blask Index show that Lithuania’s Competitive Earnings Baseline (CEB) is $284.2 million (€212 million) —yet nine of the country’s most prolific bookmakers (according to Blask) do not hold a local license. This means a significant portion of gambling revenue flows offshore, unregulated and untaxed.

Controversies Along the Way

The LPT’s efforts have not been without controversy. In mid‑2024, the EGBA alleged that Walletto, a Lithuanian fintech company, had been facilitating payments to illegal online gambling operators. The LPT responded by intensifying its oversight of payment intermediaries.

The Challenge of Channelisation

Channelisation—the percentage of gambling activity that takes place within the regulated market—remains a key metric for the LPT. By blocking high‑profile operators like Polymarket, the regulator aims to push users toward licensed alternatives. The move is seen as a step in the right direction, even if the black market remains sizable.

Conclusion: What’s Next for Prediction Markets?

The Lithuanian decision represents a significant legal and regulatory landmark. For Polymarket, the path forward in Europe is narrow: either obtain a license in a friendly jurisdiction (Gibraltar, potentially the UK) or face continued prohibition. For regulators, the case reinforces the need to update gambling laws to explicitly address prediction markets—either to ban them or to create a bespoke regulatory framework.

As the debate rages on, one thing is clear: the era of unregulated prediction markets operating under the radar is drawing to a close.

Note: For operators and marketers interested in responsible gaming, a masterclass on integrating responsible gaming into marketing strategy is available on 1 October. Details can be found at the SBC Summit website.