South Korea has given Polymarket a chance to defend its operations before regulators decide whether to seek corrective measures over concerns that the prediction market platform could violate the country’s gambling laws.
Summary
- South Korean regulators will listen to Polymarket’s response before deciding on possible corrective actions.
- Authorities are reviewing whether the platform’s prediction markets violate the country’s gambling laws.
- The review follows an earlier police investigation into South Korean Polymarket users for alleged illegal gambling.
The Broadcasting, Media and Communications Review Committee said Monday it will hear Polymarket’s explanation before making a final decision on a corrective request linked to the platform’s legality and service model. According to a machine translation of the committee’s statement, regulators decided to allow the company to present its position in order to thoroughly examine both Polymarket’s legal status and the operation of its services.
Instead of issuing an immediate recommendation, the committee said it wanted to verify whether the platform’s activities fall within South Korea’s legal framework governing online gambling-related services. The review could determine whether authorities proceed with corrective measures against the platform.
Regulators are reviewing whether Polymarket violates gambling laws
Law of the National Gambling Control Commission of South Korea classify illegal gaming businesses as services that facilitate speculative gambling over the Internet. The law also gives regulators authority to identify, monitor and respond to companies that may fall into that category.
As part of that review, authorities are evaluating whether Polymarket prediction markets comply with national regulations. The committee’s decision to seek the company’s response comes before any final compliance recommendations are made.
Outside of South Korea, Polymarket already limits access in multiple jurisdictions. According to the company, users in 33 countries I can’t access its platform, including the United States, United Kingdom, France, Germany, Brazil, Singapore, Japan and Australia. Polymarket says those restrictions are designed to comply with sanctions, local financial regulations, betting and prediction market laws, anti-money laundering requirements and Know Your Customer rules.
The company is also blocking access in select regions within otherwise supported countries, including Alberta, British Columbia, Ontario and Quebec in Canada, along with Crimea, Donetsk and Luhansk in Ukraine.
Authorities have expanded scrutiny beyond individual users
The attention of South Korean authorities has increasingly shifted beyond local users to the platform itself. The latest review follows an earlier criminal investigation involving South Korean users who allegedly participated in election-related prediction markets that authorities considered illegal gambling.
On June 5, Gangwon Provincial Police opened what local media described as the country’s first investigation into local Polymarket users for suspected illegal gambling. According to these reports, the investigation was requested by the National Police Agency.
South Korean law provides for financial penalties and possible prison sentences for gambling-related crimes. According to the country’s Criminal Law, gambling can result in a fine of up to 10 million won (about $6,500), while regular gambling can carry a prison sentence of up to three years or a fine of up to 20 million won. On the other hand, operating a gambling venue for profit is punishable by up to five years in prison or a fine of up to 30 million won.
For now, the review committee has not announced any coercive measures against Polymarket. Instead, regulators have chosen to consider the company’s explanation before deciding whether corrective measures should be sought, leaving the platform’s status in South Korea to depend on the outcome of that legal assessment.
