South Korea to Determine Whether Polymarket’s Offering Is Legal

The undisputed growth of prediction markets has attracted the attention of South Korean authorities, who will now review the Polymarket platform to determine whether its products violate the local law.

South Korea to Probe the Prediction Market Platform

The Korea Communications Standards Commission has initiated a review into the leading event contracts platform Polymarket to see whether its services constitute gambling under the local law. The review comes in response to a complaint related to the platform.

For context, prediction market operators insist that the products they offer do not constitute gambling due to a variety of factors, including their peer-to-peer nature. Instead of playing against the house, players trade shares in the outcomes of events against one another, with the platform taking a cut from share purchases.

This format has become a major point of contention, especially in North America. In South Korea, meanwhile, the Communications Standards Commission will carefully examine the matter and will also look into foreign regulatory cases to determine whether Polymarket violates the local gambling laws.

For context, Polymarket is not only available in South Korea but also has services in the local language and is actively targeting local customers.

The South Korea probe comes amid broader concerns about gambling and underage gambling in the country.

Prediction Markets: A Point of Contention on a Global Scale

In the meantime, Polymarket continues to face regulatory headwinds in other markets, too, including the US, where prediction markets have become a very divisive matter. While event contract operators continue to insist that their products are not gambling, regulators, tribal authorities, and some gambling industry stakeholders have begged to differ.

One of the major complaints against the sector is that it circumvents local gambling regulations since prediction markets are regulated not by local gambling regulators, but by the Commodity Futures Trading Commission, which allows them to operate in all 50 states. Another major issue has been insider trading concerns.

While several states have taken action against prediction markets, this has only prompted lawsuits by the CFTC.

Beyond the US, several markets have designated Polymarket as an illegal gambling platform and taken action to prevent it from offering its products locally. These include Australia, Argentina, Brazil, France, Germany, India, Italy, New Zealand, Singapore, Thailand, and Ukraine.