South Korean police have initiated the country’s first-ever illegal gambling investigation targeting local users of Polymarket, a popular decentralized prediction market platform. Led by the Gangwon Provincial Police Agency at the request of the National Police Agency, the probe comes amid a surge of domestic interest in political betting following recent local elections. As authorities crack down on unauthorized wagering, local traders now face the real possibility of severe financial penalties, adding another layer of regulatory pressure to the blockchain-based platform.
The Legal Risks for South Korean Polymarket Traders
Under South Korean law, betting is heavily restricted and strictly monitored. The only state-authorized platform for wagering is Sports Toto, which enforces strict caps on individual bets. Participation in unauthorized online betting websites is considered a criminal offense. Authorities are now examining whether trading crypto-based shares on the outcomes of real-world events fits the legal definition of gambling, and early enforcement actions suggest they believe it does.
If prosecuted, local Polymarket users could be punished under Article 246 of the Criminal Act, a statute that covers both casual and habitual gambling offenses. Those found guilty may face fines of up to 10 million won, which translates to roughly $6,500. The timing of this probe is no coincidence; it directly follows a wave of heavy betting tied to recent major elections, where President Lee Jae-myung’s ruling Democratic Party secured sweeping victories and Oh Se-hoon won another term as the mayor of Seoul. Political contracts have drawn massive attention, including one specific market predicting whether President Lee Jae-myung would leave office in 2026, which alone generated nearly $54,000 in trading volume and quickly caught the eye of law enforcement.
A Growing Global Crackdown on Prediction Markets
South Korea’s aggressive stance mirrors a broader international pushback against decentralized prediction platforms. While Polymarket remains accessible to South Korean residents for now, the platform has faced outright bans elsewhere. The site is currently geoblocked in 35 different regions worldwide, with countries like Singapore, Poland, Portugal, Hungary, Ukraine, Brazil, and Indonesia completely prohibiting or restricting access due to local gambling and financial regulations.
Even in jurisdictions where the platform remains operational, political and regulatory scrutiny is mounting rapidly. In the United States, lawmakers recently introduced legislation to prevent government officials from trading on political prediction markets. This move was sparked by widespread insider trading concerns after a Polymarket user netted over $400,000 betting on the removal of then-Venezuelan President Nicolás Maduro. Following these controversies, the U.S. House Oversight Committee sent inquiries directly to Polymarket’s leadership regarding market manipulation. In response to the compounding global pressure, the company has stated it is considering implementing mandatory Know Your Customer (KYC) identity verification to better align with international financial standards.
