Crypto rails made prediction markets global, gambling laws may make them local again
South Korean police have launched the country’s first probe into illegal gambling by domestic Polymarket users, tracing crypto transactions to identify bettors on the June 3 local election. Those found liable could face fines under criminal gambling law, signaling a shift from blocking platforms to pursuing individual users. The case fits a broader global crackdown on prediction markets. Brazil blocked 27 platforms and banned event contracts tied to sports, politics, and similar outcomes; India classified prediction markets as prohibited online money gaming and moved to block Polymarket and Kalshi; Indonesia, Thailand, and Spain also imposed restrictions or blocks. In the U.S., Kalshi and Polymarket face an unresolved clash between federal derivatives oversight and state gambling laws, alongside congressional scrutiny over insider-trading concerns. Overall, crypto adoption has outpaced legal permission for crypto-native financial products. Regulators are increasingly targeting the most popular markets—sports, politics, and elections—while platforms face pressure to split into compliant financial contracts and offshore or geofenced betting-style products.
