Why is South Korea investigating Polymarket users?

South Korean authorities are investigating residents who allegedly placed bets on local election outcomes through Polymarket. The probe marks one of the first cases where regulators are targeting individual users rather than focusing solely on blocking access to the platform.

What penalties could South Korean Polymarket users face?

Individuals found to have violated South Korea's gambling laws could face fines of up to 10 million won ($6,500). Authorities are reportedly tracing cryptocurrency transaction records to identify participants nationwide.

Which countries are restricting prediction markets?

South Korea joins countries including India, Brazil, Indonesia, Thailand and Spain that have imposed restrictions on prediction market platforms. Measures range from platform blocks and gambling classifications to user enforcement and derivatives bans.

Why are sports and political contracts at the centre of the debate?

Sports and political events account for most activity on major prediction platforms. Since these categories generate the majority of trading volume, they have become the primary focus of regulators concerned about gambling and speculative behaviour.

How are India and Brazil regulating prediction markets?

India classifies many prediction market contracts as prohibited online money gaming, while Brazil has restricted derivatives linked to sports, politics and social events. Both countries reached similar outcomes through different legal frameworks.

What is happening with prediction markets in the United States?

The US remains divided between federal derivatives regulation and state-level gambling laws. While Kalshi operates under a regulated framework and Polymarket has re-entered the US market, legal disputes continue over how event contracts should be classified.

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Prediction markets face global regulatory squeeze

Q: Why are regulators concerned about prediction markets?

Many regulators argue that contracts tied to elections, politics and sports resemble gambling products rather than financial instruments. Concerns also include market manipulation, insider trading risks and consumer protection issues.

Q: How large have prediction markets become?

Combined monthly trading volume on Polymarket and Kalshi grew from less than $5 billion in September 2025 to more than $10 billion in May 2026. This rapid growth has attracted greater regulatory attention around the world.

Written by Brie CarterPublished Jun 8, 2026, 12:41 AM

South Korean authorities have opened the country's first investigation into users of prediction market platform Polymarket, marking a significant escalation in regulatory scrutiny of crypto-based event trading.

The Gangwon Provincial Police Agency is tracing cryptocurrency transaction records to identify individuals who wagered on South Korea's June 3 local elections, with those found in violation facing fines of up to 10 million won ($6,500).

The probe reflects a broader global crackdown on prediction markets as regulators increasingly classify election, political and sports contracts as gambling products rather than financial instruments.

Combined monthly trading volume on Polymarket and Kalshi rose from less than $5 billion in September 2025 to more than $10 billion in May 2026, with sports, politics and crypto-related contracts accounting for the vast majority of activity on both platforms.

Brazil, India, Indonesia, Thailand and Spain have all introduced restrictions ranging from platform blocks and gambling classifications to derivatives bans and enforcement actions against users and service providers.

In the United States, regulators and lawmakers continue to debate whether prediction market contracts should be treated as regulated derivatives or gambling products, while congressional scrutiny has intensified over concerns about potential insider trading and government employee participation.

The growing regulatory divide highlights a challenge for the industry, as prediction markets rely heavily on sports and political contracts that drive most user activity, while authorities increasingly target those same categories through gambling laws, derivatives regulations and consumer-protection frameworks.