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South Korea has ordered domestic access to Polymarket to be blocked after regulators concluded that the crypto prediction market provides users with an illegal gambling environment.
The decision was approved on August 18 by the Broadcasting, Media and Communications Review Committee. The action follows a regulatory review opened in July and extends Korean scrutiny to the platform itself after a separate police investigation into domestic Polymarket users.
Regulator Says Winner-Takes-All Markets Encourage Gambling
The committee said Polymarket could fall under provisions covering assistance with gambling or operating a gambling venue under South Korea’s Criminal Act. Some activity could also constitute prohibited conduct under the National Sports Promotion Act.
Regulators examined Polymarket’s role in creating markets, setting trading rules and providing systems for crypto deposits, withdrawals and settlement. They also considered transaction fees collected by the platform when assessing whether its operator benefits financially from the activity.
The committee said contracts covering politics, economics, elections, sports and weather can produce extreme gains or losses based on events outside users’ control. It concluded that the winner-takes-all structure encourages speculative gambling behavior.
Polymarket’s Noncustodial Model Does Not Exempt it From Korean Law
Polymarket argued that it operates through noncustodial peer-to-peer transactions and smart contracts rather than directly collecting or managing customer funds. The company also pointed to its removal of Korean-language services and lack of support for South Korean won payments.
The committee rejected those arguments, saying decentralized technology and other technical features do not place a service outside Korean law when domestic users can still access it. Regulators also cited a Polymarket contract tied to August rainfall in Seoul as an example of markets relevant to Korean users.
June Police Probe Preceded August 18 Blocking Decision
Gangwon Provincial Police began investigating domestic Polymarket users in June over suspected illegal gambling involving election-related prediction markets. The investigation followed a request from the National Police Agency.
The August 18 decision separately targets access to Polymarket itself. France also ordered internet service providers to block the platform in July after its gambling regulator classified its offering as illegal.
South Korea’s committee has now approved a corrective request requiring access to Polymarket to be blocked. The decision follows its conclusion that the platform’s structure provides domestic users with an illegal gambling environment despite its noncustodial model.
