South Korea weighs action against Polymarket over gambling concerns

South Koreas media and communications review body said it will hear from Polymarket before deciding whether to take corrective action against the prediction market platform.

On Monday, the Broadcasting, Media and Communications Review Committee said it would allow Polymarket to submit its position before making a final decision on a corrective request regarding gambling concerns.

“We decided to provide an opportunity for Polymarket to submit its opinion to thoroughly verify the legality of Polymarket and the way the service is operated,” the committee said, according to a machine translation of the press release.

South Korea's National Gambling Control Commission Act defines “illegal gaming business” to include providing online services that enable speculative gambling and gives regulators authority to monitor and combat such businesses.

The review comes as Polymarket faces access restrictions in several jurisdictions. According to Polymarket, its platform is restricted in 33 countries, including the US, United Kingdom, France, Germany, Brazil, Singapore, Japan and Australia.

Related: US dominates Polymarket political bets despite geoblock: Report

South Korea's scrutiny moves from users to the platform

The review marks a shift in South Korea's scrutiny of Polymarket from users to the platform itself. It also follows an earlier police probe into local Polymarket users over alleged illegal gambling linked to election-related markets.

On June 5, the Gangwon Provincial Police launched what was reportedly South Koreas first illegal gambling probe into local Polymarket users. The investigation was requested by the National Police Agency, according to local media reports at the time.

Under South Koreas Criminal Act, gambling is punishable by a fine of up to 10 million won (about $6,500), while habitual gambling can carry up to three years in prison or a fine of up to 20 million won. Meanwhile, operating a gambling venue for profit is punishable by up to five years in prison or a fine of up to 30 million won.

South Korea’s Criminal Act. Source: Korea Legislation Research Institute

Polymarket says its restrictions are designed to comply with sanctions, local financial rules, gambling and prediction market laws, anti-money laundering requirements and Know Your Customer regulations.

The company also lists certain regions within otherwise accessible countries as restricted, including Alberta, British Columbia, Ontario and Quebec in Canada, as well as Crimea, Donetsk and Luhansk in Ukraine.