South Korea blocks Polymarket over gambling concerns

South Korea is blocking the prediction platform Polymarket. The South Korean media and communications oversight commission voted on 18 August to impose an access ban, because in its view the platform’s winner-takes-all structure encourages gambling behaviour. Polymarket disputes that ruling and points to the platform’s decentralised setup.

In brief:

• South Korea is blocking access to Polymarket over alleged illegal gambling behaviour
• The regulator considers markets on politics, sport and weather to undermine frugality
• Polymarket claims its peer-to-peer structure and smart contracts place it outside the rules

Winner-takes-all structure decisive for regulator

The South Korean media and communications oversight commission unanimously decided on 18 August to block access to Polymarket. The reason is the platform’s so-called winner-takes-all design, in which the outcome of events such as elections, sports matches and the weather entirely determines who makes a profit or a loss. The commission rules that this fuels gambling addiction.

According to Digital Asset, the commission also takes into account that Polymarket itself manages the markets, sets the trading rules and offers a system for deposits and payouts in digital assets. Because the platform receives a fee for this, the regulator concludes that Polymarket economically benefits from what it regards as gambling activity.

Polymarket: platform falls outside definition of gambling

Polymarket opposes the decision. The platform states that it operates through a non-custodial peer-to-peer structure and smart contracts, so it does not itself manage or hold user funds. Therefore, it should not be regarded as an organiser of gambling activities.

The commission disagrees. It argues that technical features such as decentralisation or an order book based on centralised technology do not justify circumventing South Korean law. As long as the platform in practice offers an illegal gambling environment to Korean users, the commission considers a block unavoidable.