South Korea has mandated internet service providers to block access to Polymarket following a review by regulators regarding potential illegal gambling activities associated with the prediction market platform. This decision adds South Korea to the growing list of regions that have prohibited Polymarket while authorities continue to evaluate prediction markets against existing gambling and financial regulations.
The Korea Communications Standards Commission (KCSC) started investigating Polymarket in July, allowing the platform an opportunity to argue its case for exemption from South Korean gambling rules. The platform contended that its blockchain-based, decentralized nature should qualify its activities as non-gambling.
Polymarket stated:
"Because the platform operates via non-custodial peer-to-peer (P2P) transactions and smart contracts, we do not act as an ‘organiser’. Furthermore, because we do not directly collect or manage funds, nor do we issue sports lottery tickets, we do not satisfy the legal requirements for violating the Criminal Act or the National Sports Promotion Act, nor do we meet the criteria for speculative/gambling activities."
However, the KCSC dismissed these arguments, asserting that the technological framework of Polymarket does not exempt it from South Korean gambling laws. The commission highlighted that Polymarket engages in contracts related to events occurring in South Korea, rendering its operations illegal under current legislation.
The KCSC pointed out:
"The platform cannot evade the application of domestic laws simply by citing technical characteristics or service delivery methods – such as the presence or absence of a Korean-language service, decentralised technology, or centralised technologies (like trading interfaces and order books). Because Polymarket targets South Korea-specific issues (such as ‘August Precipitation in Seoul’) and provides a practical illegal gambling environment to domestic users based on a winner-take-all profit/loss structure driven by chance, an access block is inevitable to protect domestic users."
This move by South Korea represents yet another blow to Polymarket, which is already facing significant restrictions in multiple countries as the platform's use of decentralized technology and financial mechanisms has not been sufficient to prevent local prohibitions.
