South Korean police probe local Polymarket users in first illegal gambling case

South Korean police are investigating domestic users of Polymarket on suspicion of illegal gambling, in what local reports described as the country's first criminal case targeting users of the prediction market platform. Police cyber units are reportedly tracing transactions and identifying South Koreans who placed bets on Polymarket amid heavy trading before the June 3 national election. The case adds to a parallel review by the Korea Communications Standards Commission into whether the service should be classified as illegal gambling, a finding that could lead to local internet providers blocking access. The probe also highlights a broader unresolved question for crypto-based prediction markets: whether event contracts should be treated as gambling or regulated as financial products such as securities, derivatives or commodities. South Korean law bans most gambling except limited state-sanctioned activities, but legal experts cited in the reports said no local court has directly ruled on blockchain-based prediction markets, leaving prosecutors in largely untested territory. The pressure on Polymarket comes as regulators in countries including France, Germany, Italy, Spain, India, Brazil, Australia, Argentina and Indonesia have moved to restrict access or step up enforcement, while some U.S. states have also raised concerns. Bernstein estimated crypto-based prediction market volumes at about $51 billion in 2025, with some experts expecting annual growth of as much as 80%, implying the sector could reach trillion-dollar annual volume within this decade.