South Korea has taken another step toward tightening its oversight of prediction markets by evaluating regulatory measures against Polymarket, the U.S.-based blockchain prediction platform, after concluding that its operations could fall within the country's legal definition of illegal gambling. The case has become one of Asia's most significant regulatory reviews of decentralized prediction markets and could establish a precedent for how such platforms are treated under South Korean law.
The controversy intensified following the substantial trading activity recorded during the 3 June 2026 local elections, particularly the prediction market on the Seoul mayoral race, which generated approximately US$52.2 million in trading volume. As a result, on 5 June 2026, the Gangwon Provincial Police Agency, acting in coordination with the Korean National Police Agency (KNPA), launched the country's first criminal investigation into South Korean Polymarket users over alleged illegal gambling conducted through cryptocurrency.
Korea Communications Standards Commission (KCSC), chaired by Ryu Hee-rim, is assessing whether Polymarket violates South Korea's gambling legislation. If the commission determines that the platform provides unauthorized gambling services, it may request internet service providers to block access to the website nationwide.
Ryu Hee-rim
The investigation is based on Article 246 of South Korea's Criminal Act, which prohibits private gambling except for activities expressly authorized by the State. Legal exceptions include Sports Toto, operated by the Korea Sports Promotion Foundation (KSPO) under the leadership of Ha Hyeong-joo; the national lottery; horse racing; cycle racing; boat racing; casinos open exclusively to foreigners; and Kangwon Land, the country's only casino where South Korean citizens are permitted to gamble. Sports Toto also imposes a 100,000-won maximum betting limit per wager, reflecting the country's restrictive gambling framework.
Polymarket argues that it operates prediction markets, not traditional betting services. South Korean authorities, however, maintain that staking money on uncertain future outcomes through contracts settled in USDC on the Polygon blockchain may constitute gambling under existing legislation. To date, no South Korean court has issued a definitive ruling on whether blockchain-based prediction markets qualify as gambling, making the case a potentially landmark legal precedent.
Ha Hyeong-joo
The investigation also forms part of a broader global regulatory trend. Throughout 2026, Polymarket has faced restrictions, enforcement actions or investigations in Brazil, Portugal, the U.S. state of Nevada, and other jurisdictions, while South Korea now considers whether to follow a similar path by preventing the platform from operating without a local licence in one of Asia's most sophisticated digital markets.
