Crackdowns Push Crypto Prediction Markets Back to Local

South Korean police on June 5 opened the country’s first illegal-gambling probe targeting residents who placed bets on Polymarket markets tied to the June 3 local elections. The Gangwon Provincial Police Agency, acting on a request from the National Police Agency, is tracing cryptocurrency transaction records to identify individual bettors. Identified users could face fines up to 10 million won under Article 246 of the Criminal Act. Polymarket’s resolved 2026 Seoul mayoral market recorded $52.2 million in total volume.

Regulators in several countries have taken different actions against prediction platforms. On April 24, Brazil’s National Monetary Council issued a resolution that blocks 27 platforms and prohibits derivatives tied to sports, online gaming and political or cultural outcomes. The measure narrowed permitted contracts to economic benchmarks such as interest rates and exchange rates. In India, the Promotion and Regulation of Online Gaming Act 2025 took effect on May 1, 2026, classifying prediction markets as prohibited online money gaming; India’s information ministry has issued blocking orders and on April 25 warned VPN providers against enabling access to blocked sites.

Spain’s gambling regulator ordered internet service providers to block Polymarket and Kalshi on May 26 while disciplinary proceedings continue. Thailand’s cybercrime authorities classified Polymarket as illegal online gambling. Indonesia blocked access to Polymarket after markets appeared that speculated on an early end to President Prabowo Subianto’s term. Measures applied to prediction markets now range from platform bans and ISP blocking to restrictions on derivatives and direct user enforcement.

The United States presents a mixed legal picture. Kalshi operates under a designated contract market license with the Commodity Futures Trading Commission. Polymarket relaunched a U.S. exchange in late 2025 after acquiring a regulated derivatives firm. Trading on offshore venues increased: Polymarket International reported $9 billion in April 2026 versus $1.3 billion on Polymarket US. In May 2026, the U.S. House Oversight Committee opened a probe into Kalshi and Polymarket to examine whether government employees traded on classified information, and lawmakers have discussed possible restrictions on officials trading on these platforms.

Trading volumes across major prediction platforms rose sharply from under $5 billion in combined monthly volume in September 2025 to more than $10 billion in May 2026. Since mid-2024, sports, politics and crypto outcomes accounted for roughly 90% of global trading on the two largest platforms; sports represented about 80% of Kalshi volume while politics made up roughly 32% of Polymarket volume. Kalshi reported more than 400 suspicious trades in the first five months of 2026, exceeding its total for all of 2025.

Observers note a range of enforcement approaches in high-adoption markets. South Korea ranks 15th on Chainalysis’ 2025 Global Crypto Adoption Index; six of the top 20 adoption markets have adopted measures against prediction platforms through gambling laws, derivatives restrictions, ISP blocks or user enforcement. The current regulatory landscape has led to a mix of licensed financial-contract offerings in some jurisdictions and geo-restricted or offshore crypto-native markets in others, with enforcement efforts targeting platforms, access providers and individual users.