South Korea blocks Polymarket for alleged illegal gambling operations
Prediction market platform Polymarket has faced another setback after being blocked by South Korea’s media regulator, the Korea Media and Communications Standards Commission (KMCSC), for alleged illegal gambling.
The decision was made on 18 August, following a review led by the KMCSC Communications Deliberation Subcommittee. The review was brought to light earlier in May, after a KMCSC official told Bloomberg the agency would investigate whether Polymarket facilitated illegal gambling.
The following month, the Gangwon Provincial Police Agency launched an investigation into domestic users at the request of the Korean National Police Agency, and in July, the KMCSC announced it would give Polymarket a chance to explain the legality of its operations before concluding its review.
Despite that, the KMCSC said that the structure of Polymarket’s event contracts, where users are able to trade “Yes” or “No” on various scenarios, including politics, entertainment, and sports, provides a “winner-take-all profit-and-loss structure based on chance” which it argues creates a “practical illegal gambling environment for domestic users.”
The KMCSC therefore determined that Polymarket’s offerings violate the country’s Criminal Act and National Sports Promotion Act, allowing the agency to initiate a country-wide block.
Following the decision, Polymarket appeared at a statement of opinion on 18 August and told the KMCSC that it had violated neither act. The prediction market operator argued that, because it had removed Korean-language services and disabled KRW payments on its platform, it was not subject to South Korean law.
“Technical features or service methods cannot exempt a platform from domestic legal compliance. Since Polymarket provides a real illegal gambling environment to domestic users, access blocking is unavoidable to protect them,” the KMCSC countered in a statement obtained by The Chosun Daily.
Polymarket is now banned in over 30 countries, including recent blocks in Indonesia, Italy and France. The platform also faces problems at home over whether certain contracts should be regulated by states or the federal government, with the outcome likely to reach the US Supreme Court.
Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
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The Backstory
Prediction markets meet Korea’s gambling firewall
South Korea’s move to block Polymarket did not emerge in isolation. It reflects a broader enforcement push against online gambling, offshore platforms and digital betting structures that Korean authorities increasingly view as capable of bypassing domestic law even without a local corporate presence.
The country’s media regulator, the Korea Media and Communications Standards Commission, had been examining whether Polymarket’s event contracts amounted to illegal gambling before deciding to restrict access nationwide. That review followed concern that the platform’s binary “Yes” or “No” markets, including those tied to politics, sports and entertainment, could expose Korean users to a betting-like profit-and-loss structure outside the regulated gambling framework.
Earlier reporting on the regulator’s inquiry showed the central question was not simply whether Polymarket called itself a financial or information market, but whether its product functioned like gambling for domestic users. The commission’s review, described in a prior account of South Korea’s scrutiny of Polymarket, focused on whether the service could be classified as illegal gambling and whether the availability of Korean-language features indicated it was targeting users in the country.
That distinction matters because South Korea tightly restricts gambling. Casino access for most Korean nationals is limited, sports betting is permitted only through approved channels and private online gambling operations are broadly prohibited. In that context, prediction markets occupy a difficult space: They can resemble financial speculation, information aggregation or wagering depending on how regulators define the contract, the event and the payout mechanism.
A regulatory concern became an access ban
The Polymarket case moved from review to enforcement after Korean authorities considered whether the platform’s structure created a practical gambling environment. The regulator’s conclusion was that technical design, use of cryptocurrency or the removal of Korean-language services did not determine whether domestic law applied. Instead, the focus was access and effect: If users in South Korea could participate in markets that regulators deemed chance-based and winner-take-all, the service could be blocked.
That reasoning follows a pattern used by authorities in several jurisdictions. France, Italy, Singapore and other markets have treated prediction market platforms as gambling or unauthorized financial activity when customers can stake value on real-world outcomes. South Korean officials also reviewed how other countries had responded, according to earlier coverage, underscoring that the matter had become part of a global regulatory dispute rather than a one-off content moderation decision.
Polymarket’s position has been that it is not offering illegal gambling in South Korea, particularly after removing Korean-language services and disabling Korean won payments. But Korean regulators appear to have taken a substance-over-form approach. If the product remains available to domestic users and provides a pathway to profit from event outcomes, authorities can treat it as falling within local prohibitions regardless of payment rails or server location.
The stakes are larger than one website. A national block signals that South Korea may not wait for criminal prosecutions or lengthy financial classification debates before acting against borderless platforms. For prediction market operators, that raises compliance costs and legal uncertainty in jurisdictions where gambling, securities and communications regulators may all claim a role.
Illegal online gambling has become a priority target
The decision also lands amid a more aggressive campaign against illegal online gambling networks. Korean police and prosecutors have been pursuing operators, payment channels and users linked to offshore betting sites, often describing the sector as a convergence point for organized crime, money laundering and cybercrime.
In one major case, authorities said they were preparing charges against the alleged head of an international online gambling ring that operated from Malaysia and Cambodia and generated billions of dollars in wagers. The suspect, repatriated to South Korea through Incheon International Airport, allegedly supplied game money to more than 1,400 domestic gambling sites. Police said they would seek to seize criminal proceeds and dismantle subordinate domestic organizations, according to coverage of the alleged overseas gambling network.
That case helps explain the intensity around platforms that may not fit traditional gambling categories. Korean enforcement agencies have seen offshore online gambling as difficult to contain once domestic users can access foreign sites, fund accounts and move winnings through opaque channels. Even where a platform is not accused of operating as a criminal ring, regulators may view unrestricted access as creating similar enforcement risks.
The government’s approach has broadened from targeting betting operators to pursuing infrastructure, payment flows and affiliated groups. Police have said thousands of individuals have been investigated or arrested in operations tied to illegal igaming. The result is a regulatory environment in which products involving event-based stakes face skepticism, especially if they are accessible online and difficult to supervise through Korean licensing systems.
Organized crime and cyber links sharpen the response
Authorities have also tied illegal gambling to a wider shift in organized crime. Figures released by the Korean National Police Agency showed that gang members were arrested more often for online scams, including illegal igaming, than for traditional offenses such as assault or extortion. In reporting on the rise of gang-linked digital crime, police data showed 56.3% of organized crime members arrested in 2024 were involved in digital crimes.
That trend has policy implications. Illegal gambling is no longer treated only as a vice issue or a matter of consumer protection. It is increasingly framed as a revenue engine for hierarchical criminal groups that can scale operations online, recruit younger members and avoid the visibility of street-level crime. Such groups can use gambling sites, phishing, fraud and money movement tools in overlapping ways.
National security concerns have added another layer. Prosecutors charged a South Korean man over alleged involvement in the sale of illegal gambling domains for North Korean hackers. The man was accused of working with hackers tied to North Korea’s 313 General Bureau and selling domains linked to 16 illegal gambling sites to South Korean operators. Prosecutors alleged the sites generated millions of dollars and that a portion of the proceeds went to the North Korean regime, according to coverage of the North Korea-linked gambling case.
Those cases do not make Polymarket analogous to criminal gambling syndicates. But they show why Korean authorities may apply a low tolerance standard to online products that allow domestic users to stake value on outcomes outside approved channels. In a market where illegal gambling proceeds have been linked to organized crime and hostile cyber actors, regulators have strong incentives to block first and litigate the finer distinctions later.
Sports integrity adds political sensitivity
Sports betting is particularly sensitive in South Korea because gambling concerns intersect with league integrity and public trust. The Korea Baseball Organization recently suspended four Lotte Giants players after gambling violations tied to visits to an ebetting game facility near the team’s spring training base in Taiwan. The league imposed suspensions before the completion of a police investigation, citing the seriousness of the matter and reputational risk, as detailed in coverage of the Korea Baseball Organization sanctions.
That disciplinary action illustrates how gambling scrutiny extends beyond criminal operators to institutions whose credibility depends on perceived fairness. Prediction markets can include sports-related contracts, and even where those markets are framed as forecasts rather than bets, regulators may worry about the same incentives that concern leagues: inside information, manipulation, reputational damage and normalization of wagering around competitions.
The Polymarket block therefore sits at the intersection of several Korean priorities: suppressing illegal online gambling, limiting offshore access, protecting sports integrity and avoiding digital platforms that regulators believe can evade local rules through design choices. The platform’s global prominence made it a test case for how South Korea would treat prediction markets as they become more mainstream.
For the industry, the message is that localization decisions alone may not control legal exposure. Removing Korean-language features or domestic currency payments may reduce evidence of targeting, but regulators can still act if users remain able to access a service and engage in activity deemed illegal under Korean law. For South Korea, the block reinforces a broader enforcement model: digital gambling risk is treated as a cross-border problem requiring administrative, police and prosecutorial responses before it becomes entrenched.
