Polymarket under scrutiny again: South Korea launches anti-gambling law review, June election markets spark the probe

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According to Bloomberg, the Korea Communications Standards Commission (KCSC) has officially launched a review of the prediction market platform Polymarket to determine whether it provides illegal gambling content and violates South Korea's anti-gambling laws. With local elections approaching in June, multiple election-related betting markets are currently active on Polymarket, making the timing particularly sensitive. (Previous coverage: Polymarket Taiwan election betting arrests! Rumors of "multiple people woken up by search warrants") (Background: Polymarket submits "parlay contracts" for CFTC self-certification! SEC Chair seeks comments on prediction market ETFs) Key Highlights - The Korean KCSC has officially launched a review into whether Polymarket violates anti-gambling laws, with a potential for a total platform ban. - With local elections in June approaching, multiple election betting markets are already active on Polymarket. - Eight countries, including France, Germany, and Italy, have already classified Polymarket as illegal gambling and blocked access. South Korea’s current laws strictly restrict gambling activities, allowing only state-sanctioned operations such as horse racing and sports lotteries, while online gambling is strictly prohibited. A KCSC official confirmed to the media on 5/21 that they have received reports regarding Polymarket and have initiated a formal review process. Authorities will examine Polymarket’s Korean language interface support and local availability to determine if the platform falls under domestic jurisdiction; if found to be in violation, a direct block may be imposed. Polymarket argues that the odds on the platform are determined by market participants through the buying and selling of contracts rather than being set by the platform itself, and therefore should not be subject to anti-gambling regulations. However, this is the exact gray area that regulators in various countries refuse to accept: most law enforcement agencies do not care about the mechanism design, only whether users are wagering real money on uncertain outcomes. 32 Korean political markets are active, with the Democratic Party's win probability at 97% In Polymarket’s politics category, there are 32 active markets for South Korea alone. In the party win/loss market for the June 3rd local elections, the Democratic Party of Korea is crushing the People Power Party with an implied probability of 97.3%, reflecting President Lee Jae-myung's approximately 67% approval rating and consistent lead in polls. The Seoul mayoral election market is similarly lopsided, with Democratic Party candidate Jung Won-ho leading incumbent Mayor Oh Se-hoon by 87.5% to 12.5%. Additionally, there are multiple derivative markets for parliamentary by-elections and presidential election margins running simultaneously. Eight countries have already blocked it, and South Korea may become the ninth France, Germany, Italy, India, Brazil, Ukraine, Australia, and Argentina have classified Polymarket as an illegal gambling site and blocked access. South Korea is one of the largest cryptocurrency trading markets in Asia and a significant user base for Polymarket in the Asia-Pacific region; if it follows the same path, the impact will be even greater. With the June local elections approaching and 32 Korean political markets updating odds daily, it is difficult for regulators to continue turning a blind eye. In Taiwan, multiple users have already been woken up by police search warrants for betting on election markets on Polymarket, as prosecutors and police tracked on-chain fund flows and matched them with exchange KYC to identify users, rendering VPN bypasses ineffective. If South Korea initiates similar enforcement, the scale and intensity are likely to be even more severe. FAQ What are the possible outcomes of the KCSC review of Polymarket? If the KCSC determines that Polymarket provides illegal gambling content, it may directly block access to the platform in South Korea, making it the ninth country to ban Polymarket after France, Germany, Italy, and others. Why does Polymarket believe it is not considered gambling? Polymarket argues that the platform's odds are determined by market participants through the buying and selling of contracts rather than being set by the platform, and therefore does not fall under the "house-based gambling" definition of anti-gambling laws. However, most national regulators do not accept this argument.

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