Korea moves to block Polymarket over illegal gambling

The Korea Media and Communications Standards Commission has ordered domestic internet service providers to block access to Polymarket, an overseas prediction market platform, after determining that the service promotes gambling.

The commission’s telecommunications review subcommittee made the decision at a meeting Tuesday, concluding that Polymarket contains information intended to facilitate gambling or establish a place for gambling under the Criminal Act. It also found that the platform provides information intended to facilitate activities similar to sports betting under the National Sports Promotion Act.

The regulator said Polymarket’s winner-take-all structure encourages gambling behavior because users can face sharply divergent financial gains or losses depending on outcomes beyond their control.

Polymarket allows users to trade contracts tied to events including politics, the economy, international relations, sports, elections and weather. The commission cited markets involving domestic issues, including a contract on Seoul’s rainfall in August, as evidence that the platform effectively provides Korean users with an illegal gambling environment.

The commission also said Polymarket’s operator manages the platform as a whole by opening markets and setting trading rules. It said the operator creates an environment in which users’ funds are effectively collected and distributed through cryptocurrency deposit, withdrawal and settlement systems, while earning revenue through transaction fees on share trading.

In its statement to the commission, Polymarket argued that it was not subject to the Information and Communications Network Act because it had removed Korean-language services and does not allow payments in Korean won.

The company also said its noncustodial, peer-to-peer trading model and blockchain-based smart contracts mean that it does not function as a gambling operator. It argued that it does not directly collect or manage user funds, nor does it issue sports betting tickets, and therefore does not meet the legal requirements for violations of the Criminal Act or the National Sports Promotion Act.

The commission rejected the argument, saying that the provision of Korean-language services, as well as the platform’s technical characteristics or operating model, cannot be used to evade Korean law.

“Regardless of whether a service is decentralized or centralized, its technological characteristics and service methods cannot exempt it from the application of domestic laws,” the commission said.

The regulator also cited overseas actions against Polymarket. France blocked access to the platform last month, citing concerns over illegal gambling, potential major user losses and the possibility of manipulation in some betting markets. Australia and Germany blocked the service in August and September last year, respectively, after classifying it as an illegal online gambling service or unauthorized betting activity.