Online gambling and VPNs have gone hand-in-hand for a while. But in a similar move online poker operators made after Black Friday, Polymarket is cracking down on their use in countries where prediction markets may not be legal.
A VPN is short for a virtual private network. It allows users to create a secure, encrypted link to a platform or website that hides a person’s IP address. VPN usage allows Polymarket users to sidestep the company’s geolocation services.
The poker world saw a similar move when the U.S. cracked down on the online poker industry. Major operators exited the U.S. market following the federal government’s actions in 2011. Companies like PokerStars ultimately moved to stay within a changing regulatory environment.
After Black Friday, some American players used VPNs to stay in the country and still play on online poker platforms that were no longer allowed to operate in the U.S.
Gordon Vayo Denied Sunday Million Money
One of the most high-profile poker VPN cases came in 2017. American poker pro Gordon Vayo, who finished runner-up in the WSOP main event a year earlier, took down a SCOOP event on PokerStars for nearly $700,000. But PokerStars confiscated the money from Vayo, claiming he broke their terms of service by using a VPN to play from America.
Vayo filed a lawsuit against PokerStars to get the money back. He said he lived in Canada part-time and admitted to using a VPN from the U.S. When he went to withdraw the money, PokerStars froze his account and withheld the money.
In the aftermath, seven-time WSOP champ Daniel Negreanu wrote on his blog that he didn’t have a problem with VPN usage.
“The real puzzling thing for me is why do sites care to waste money and resources on policing this?” he said. “The U.S. government isn’t spending a dime to do so, so why should a company outside of their jurisdiction be held to policing something they aren’t morally opposed to?
“Why is the onus on the company to assure that US players aren’t playing from the US? If the US government doesn’t want its citizens to use a product, they should police it themselves. It’s absurd to put that on the service provider.”
Polymarket Asking For Identification
Polymarket is taking similar actions.
In the face of increased scrutiny in countries like Spain and Indonesia, Polymarket is now blocking certain IP addresses linked to VPN services.
Some users are also being asked to verify their identities.
“Polymarket’s updated approach combines technical barriers with selective identity checks to stop users from dodging location restrictions,” Gizmodo said of the new restrictions.
“The company reportedly blocks known VPN IP ranges outright and flags accounts that show signs of evasion.”
Money Laundering Concerns
Along with the scrutiny of prediction markets, some jurisdictions are even adding regulations on the use of VPNs themselves, including in Ukraine, and Minnesota and Utah in the U.S. Both Kalshi and Polymarket allow cryptocurrency deposits and withdrawals, raising concerns among critics that the platforms could be used for money laundering and other illicit means.
Polymarket’s efforts include identity verification for users with unusually large positions and for those moving funds in and out of the platform quickly with high-volume amounts. The platform is shifting away from fully permissionless trading to meet anti-money laundering regulations.
That shift has been seen in other areas of cryptocurrency transactions as well. In the U.S., Polymarket offers a separate platform to meet federal regulations. The company’s Know Your Customer compliance is even more substantial.
This followed being granted a derivatives exchange license in 2025 and reaching a $1.4 million settlement with the Commodity Futures Trading Commission (CFTC) in 2022 for allowing unregistered options trading.
Some countries have begun treating prediction markets as unregulated gambling. Spain recently ordered Internet service providers to block Kalshi and Polymarket. Others cracking down on the platforms include Argentina, Brazil, India, France, Belgium, and Australia.
Prediction Markets Face Scrutiny In U.S.
In the U.S., prediction markets have been controversial since they began allowing trading on sports in 2025. State regulators have argued the platforms violate their gaming laws.
The companies claim that they are different from traditional sports betting and regulated solely by the CFTC. Commission Chairman Michael Selig agreed with that assessment in May. The CFTC sued New York over the issue in April and made a similar move against Arizona, Connecticut, and Illinois.
Kalshi has been involved in lawsuits with several states, with a Massachusetts judge railing against the company in state court. However, in April a federal appeals court ruled that Kalshi can still offer sports event contracts in New Jersey.
The industry has also received significant scrutiny from federal lawmakers. In March, a Utah senator filed a bill to prohibit the companies from offering event contracts mimicking sports betting and other “casino-style” games.
