South Korea has delayed any enforcement decision against Polymarket after giving the prediction market platform a chance to respond to concerns that its service may violate the country’s gambling laws.
Summary
- South Korea has given Polymarket a chance to respond before deciding whether to take action over gambling concerns.
- The review follows an earlier police investigation into local Polymarket users over alleged illegal election related gambling.
- The case adds to growing regulatory scrutiny of Polymarket as authorities in Europe and the United States also examine its operations.
According to the Broadcasting, Media and Communications Review Committee, it has decided to hear Polymarket’s position before ruling on whether to issue a corrective request against the platform. The committee said the additional step would allow it to verify both the legality of the service and the way it operates before reaching a final conclusion.
Under South Korea’s National Gambling Control Commission Act, an illegal gaming business includes online services that facilitate speculative gambling, giving authorities the power to monitor and respond to such activities.
The latest review comes after South Korean authorities had already begun examining local use of the platform. In early June, the Gangwon Provincial Police launched what local media described as the country’s first investigation into Polymarket users over alleged illegal gambling connected to election-related prediction markets. The probe was reportedly requested by the National Police Agency.
South Korea’s Criminal Act allows fines of up to 10 million won (about $6,500) for gambling offences, while habitual gambling can result in prison terms of up to three years or fines reaching 20 million won. Operating a gambling venue for profit carries penalties of up to five years in prison or a fine of 30 million won.
Polymarket states that access restrictions on its platform are designed to comply with sanctions, local financial regulations, gambling and prediction market laws, anti-money laundering requirements and Know Your Customer rules.
According to the company, users from 33 countries, including the United States, the United Kingdom, France, Germany, Brazil, Singapore, Japan, and Australia, cannot access the platform. It also blocks certain regions within otherwise permitted countries, including several Canadian provinces and parts of eastern Ukraine.
Global pressure on prediction markets continues
The South Korean review adds to the increasing regulatory attention facing prediction market operators in several jurisdictions.
Earlier this month, the European Securities and Markets Authority clarified that some event-based contracts offered in the European Union could already fall within the scope of the Markets in Financial Instruments Directive II if they qualify as financial instruments. The regulator said those products could also become subject to the European Union’s existing retail restrictions on binary options without requiring new legislation.
In the United States, Bloomberg and CNBC recently reported that the Commodity Futures Trading Commission is conducting a broad investigation into Polymarket’s business activities, including its social media operations.
The reported inquiry followed allegations published by The Wall Street Journal that the platform promoted simulated trading videos through paid content creators without adequate disclosure. Polymarket later told CNBC it had begun auditing its promotional content to ensure compliance with company standards and legal disclosure requirements.
On-chain research firm Allium also reported this week that U.S.-linked wallets traded about $571 million worth of political contracts on Polymarket during the past year despite the platform’s restrictions on American users.
While Allium cautioned that its country attribution covered only a small share of wallets and should be treated as directional rather than exact, the findings added to ongoing questions about how users continue accessing offshore prediction markets despite geographic restrictions.
