South Korea has given Polymarket the chance to defend its operations before regulators decide whether to take corrective action over concerns that the prediction market platform may violate the country’s gambling laws.
Summary
- South Korean regulators will hear Polymarket’s response before deciding on possible corrective action.
- Authorities are reviewing whether the platform’s prediction markets violate state gambling laws.
- The review follows an earlier police investigation into South Korean Polymarket operators for alleged illegal gambling.
The Broadcasting, Media and Communications Review Committee said on Monday it would listen to Polymarket’s explanation before reaching a final decision on the application’s legality and service model. According to the machine translation of the committee’s statement, the regulators decided to allow the company to present its position in order to fully assess both the legal status of Polymarket and how its services work.
Rather than issuing a recommendation immediately, the committee said it wanted to ensure that the platform’s activities fell within South Korea’s legal framework governing services related to online gambling. The review may determine whether authorities proceed with remedial action against the platform.
Regulators are reviewing whether Polymarket is breaking gambling laws
South Korea’s National Gambling Regulatory Commission’s law classifies illegal gaming businesses as services that facilitate speculative online gambling. The law also gives regulators the authority to identify, monitor, and respond to businesses that may fall into that category.
As part of that review, authorities are checking whether Polymarket’s prediction markets comply with domestic regulations. The committee’s decision to seek the company’s response comes before any final recommendation is made.
Outside of South Korea, Polymarket already restricts access to many areas. According to the company, users in 33 countries can access its platform, including the United States, the United Kingdom, France, Germany, Brazil, Singapore, Japan and Australia. Polymarket says those limits are designed to comply with sanctions, local financial regulations, gambling and speculation laws, anti-money laundering requirements and Know Your Customer laws.
The company also blocks access to selected regions within otherwise supported countries, including Alberta, British Columbia, Ontario and Quebec in Canada, and Crimea, Donetsk and Luhansk in Ukraine.
The authorities have extended the scrutiny of individual users
Attention from South Korean authorities has extended beyond local users to the platform itself. The latest update follows an earlier criminal investigation involving South Korean users who allegedly participated in election-related prediction markets that authorities consider illegal gambling.
On June 5, Gangwon Provincial Police opened what local media described as the country’s first investigation into local Polymarket operators for alleged illegal gambling. According to those reports, an investigation has been requested by the National Police Agency.
South Korean law has financial penalties and possible prison sentences for gambling-related offenses. Under the country’s Criminal Law, gambling can result in a fine of up to 10 million (about $6,500), while casual gambling can be punished with a three-year sentence or a fine of up to 20 million. Separately, operating a gambling establishment for profit is punishable by up to five years in prison or a fine of up to 30 million.
So far, the review committee has not announced any enforcement action against Polymarket. Instead, regulators chose to consider the company’s explanation before deciding whether to request corrective measures, leaving the status of the platform in South Korea dependent on the outcome of that official review.
