Netherlands Ban Polymarket as Crypto Regulation Tightens

Background and Context

Authorities launched an investigation months before announcing the Polymarket Netherlands ban. Regulators determined that Polymarket’s prediction markets qualify as gambling because users wager money on uncertain real-world outcomes. Dutch users reportedly placed more than $32 million in bets on the October 2025 parliamentary elections, which raised serious compliance concerns.

Dutch law strictly prohibits unlicensed gambling, especially betting on political events. Therefore, regulators ordered Polymarket to geoblock access for users in the Netherlands. If Polymarket fails to comply, it will face escalating fines and enforcement actions.

Furthermore, the Polymarket Netherlands ban reflects a broader global regulatory pattern. Ukraine banned the platform in January 2026, and Australia introduced similar restrictions earlier. Meanwhile, regulators in the United States continue debating whether prediction markets qualify as gambling platforms or financial instruments.

Despite these bans, crypto market reactions have remained limited. Previous restrictions caused short-term volatility, but trading volumes stabilized quickly as global users replaced restricted participants. However, repeated regulatory crackdowns could weaken investor confidence over time.

The 36% Crypto Tax

In addition to the Polymarket banned Netherlands enforcement, lawmakers approved the Actual Return in Box 3 Act, which significantly changes crypto taxation. This law replaces the previous system that taxed assumed returns with a model that taxes actual annual gains.

Under the new system, investors must pay a 36 percent tax on actual gains, including unrealized profits. This means investors owe taxes based on portfolio value increases even if they do not sell their crypto assets.

The law includes a €1,800 tax-free allowance and allows investors to offset losses against future gains. However, investors cannot recover taxes paid during temporary market increases if prices later fall.

This system creates liquidity pressure. For example, an investor holding €100,000 in Bitcoin that increases by 20 percent could owe more than €7,000 in taxes without selling any assets. Consequently, investors may need to sell crypto holdings to pay tax obligations.

Netherlands’ Stance on Crypto

The Netherlands continues to allow crypto ownership and trading, but regulators now enforce stricter oversight. Crypto companies must register with De Nederlandsche Bank and comply with anti-money laundering regulations.

At the same time, broader EU regulations such as MiCA strengthen oversight across Europe. Authorities have also introduced stricter gambling rules, which directly contributed to the Polymarket banned Netherlands enforcement.

While the government continues supporting blockchain innovation, recent actions show a shift toward stronger regulation. As a result, crypto businesses and investors face a more controlled and compliance-focused environment in the Netherlands.