South Korean police have booked 26 domestic users of decentralized prediction platform Polymarket for illegal gambling, referring 18 of them to prosecutors.
According to data released by the National Police Agency on September 17, the Gangwon Provincial Police Agency’s Cyber Investigation Unit found that the users collectively wagered 17.6 billion won (approximately $12.7 million) on political, economic, and social outcomes. One individual accounted for 5.7 billion won ($4.1 million) of the total betting volume.
South Korea just started criminally prosecuting people for using Polymarket
Police charged 26 users with illegal gambling and sent 18 to prosecutors
Together they wagered $12.7 MILLION, one person alone put down almost $4 MILLION on the prediction market platform
Polymarket is… pic.twitter.com/kbaMJX1bXm
— Jeremy (@Jeremybtc) September 17, 2026
Investigators reportedly identified the users by analyzing public blockchain transaction records using open-source intelligence (OSINT), despite Polymarket’s non-custodial structure and lack of real-name customer lists. Authorities argue that betting on uncertain outcomes through the platform violates Article 246 of South Korea’s Criminal Act, which prohibits gambling. However, the accused users maintain that their activities resemble derivatives trading rather than gambling. Habitual gambling can carry a prison sentence of up to three years or a fine of 20 million won ($14,000).
The investigation follows an August 18 decision by the Korea Communications Standards Commission (KCSC) to block domestic access to Polymarket, citing its winner-takes-all model as a form of gambling. Polymarket has previously disputed such classifications, noting that it does not offer Korean-language services, process local fiat currency settlements, or directly custody user funds.
Prediction markets hit $50.6B as Wall Street and sports betting take over
Prediction markets have recorded substantial growth in trading activity and private valuations. Combined monthly trading volumes across Polymarket and Kalshi reportedly reached approximately $50.6 billion, compared with less than $5 billion a year earlier. Polymarket’s private valuation climbed to $15 billion following a major funding round, while retail traders continue to dominate participation. Approximately 82.3% of users trade below $10,000, with median trade sizes typically ranging from $2 to $3.
The sector’s professionalization is increasing competition for retail traders seeking profitable opportunities. Hedge funds and algorithmic market makers are entering event contracts, potentially reducing the proportion of traders who maintain a persistent trading advantage from approximately 3% to below 1%. As competition intensifies, smaller traders may increasingly focus on specialized, lower-liquidity markets where information gaps remain.
Competition is also expanding beyond decentralized platforms. Robinhood is developing prediction-market offerings, while analysts project its prediction-market revenue could approach $600 million. Sports contracts have become a major driver, accounting for roughly 85% of Kalshi’s volume during peak weeks, while markets covering legislation, corporate valuations, and Federal Reserve decisions are broadening the sector’s reach beyond political forecasting.
How other global regulators are reacting to prediction markets
In the United States, prediction markets face competing regulatory and legal interpretations. On September 16, 2026, the Ninth Circuit Court of Appeals blocked Kalshi from offering sports event contracts on two Native American tribal lands in California. The court found that the contracts were likely subject to the Indian Gaming Regulatory Act, creating a conflict with Kalshi’s position that its products fall under federal commodities regulation.
Europe has generally taken a more restrictive approach. The European Securities and Markets Authority (ESMA) warned in July that some event contracts could fall under existing financial-market rules, including restrictions covering binary options. It noted that some contracts may qualify as bets under national gambling laws. France has gone further with its gambling regulator ordered internet providers to block Polymarket in July 2026 after determining that the platform was promoting unauthorized gambling. France’s regulator also said several other European countries, including Germany, Belgium, the Netherlands and Poland, had blocked access to Polymarket.
Meanwhile, JPMorgan Chase ended its banking relationship with Polymarket, forcing the crypto-based prediction market to move its accounts to another bank as regulatory and compliance concerns continue to shape how US banks work with digital asset companies.
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