South Korea Probes Polymarket Users Over Gambling Allegations

South Korean police have opened an investigation into local users of Polymarket, making it the country’s first known case involving the prediction market platform. Authorities suspect some users may have broken gambling laws by placing bets on the site. 

The probe follows a direct request from the National Police Agency and covers users across multiple regions, including Gangwon Province. Because South Korean law only permits limited forms of regulated betting, authorities consider activity on Polymarket potentially illegal. As a result, some users could face penalties under the country’s criminal code.

This probe comes as regulators are ramping up scrutiny on prediction markets and crypto activities. 

Police focus on domestic Polymarket users

The Gangwon Provincial Police Agency is investigating domestic Polymarket users on suspicion of illegal gambling. Under South Korean law, only Sports Toto, operated by the Korea Sports Promotion Foundation, can legally offer certain betting services. Additionally, the law limits bets to 100,000 won.

Authorities therefore view wagers placed through Polymarket as private gambling. Consequently, convicted users could face fines of up to 10 million won under Article 246 (Gambling, Habitual Gambling) of the Criminal Act.

Ahn Chang-bo, representative attorney at Law Firm Joreon, said, “It appears that the elements constituting the crime of gambling are met. However, since there have been absolutely no domestic cases of punishment for using polymarkets, it is difficult to predict the level of punishment.” Ahn is also representing some of the domestic users under investigation. 

Notably, South Korean users can still access Polymarket without bypassing IP restrictions. The Korea Communications Standards Commission said it has not reviewed the platform because it has received no formal complaints.

Global scrutiny intensifies around prediction markets

The investigation arrives as Polymarket faces growing challenges beyond South Korea. In a similar regulatory stance, India’s IT Ministry (MeitY) recently issued a formal advisory to VPN providers and internet intermediaries to crack down on offshore betting. The government warned against the widespread use of circumvention tools and stablecoins to bypass restrictions and access banned prediction markets. 

Moreover, U.S. lawmakers recently asked the Federal Trade Commission to investigate whether prediction market operators use misleading business practices. Lawmakers questioned how platforms market themselves to users while seeking treatment as financial products before regulators.

Polymarket is also facing criticism over a disputed prediction market tied to Strategy’s Bitcoin sales. The controversy began after Strategy disclosed that it sold 32 BTC within the timeframe specified in the market. However, Polymarket ultimately settled the market as “No.” The decision drew objections from some users, who argued that the platform relied on conditions that were not clearly stated in the original rules.

The platform is also encountering regulatory challenges outside the United States. In Spain, authorities recently blocked access to Polymarket and rival platform Kalshi. Regulators claim both companies operated without the authorization required under Spanish gambling laws. 

The move underscores the differing approaches regulators are taking toward prediction markets, with some jurisdictions treating them as financial products and others classifying them as unauthorized gambling services.

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