A prediction market is a platform where participants buy and sell stakes in the outcome of an uncertain future event — an election result, an economic indicator — the way they would trade a stock.
Think of it as the "Will Chelsea win, or will United?" conversation men have about sports, turned into a globally accessible platform and, in many cases, put on a blockchain.
How it works. Price is probability. The higher the likelihood of a given outcome, the higher that contract's price climbs — the price figure itself represents the crowd's estimated probability (e.g., $0.70 = 70%).
The collective-intelligence pitch. Because real money is on the line rather than just an opinion poll, participants are said to analyze information more seriously and accurately, which proponents argue produces higher forecast accuracy.
Breadth of subject matter. Elections, rate decisions, sporting events, weather — essentially any event with a knowable future outcome can become a tradable contract.
Major platforms and controversy. Polymarket and Kalshi are the two dominant global platforms operating at scale. More recently, Polymarket has also gone live inside brokerage apps such as Robinhood.
Regulation and gambling controversy. Advocates frame these platforms as a transparent information-aggregation tool; critics counter that they amount to speculative gambling and raise market-manipulation concerns. In Korea, they are strictly restricted under laws governing speculative/gambling activity.
This column covers the growth, trading volume, and revenue of prediction markets, Polymarket's dependence on Polygon, the legal regulatory landscape across major jurisdictions, and how Korean blockchain startups should approach this space.
As-of date: August 3, 2026
Principle: only confirmed figures and publicly disclosed regulations/rulings are stated here. Any estimate is attributed to the entity that produced it.
1. Scale of Growth — Confirmed Figures
1.1 July 2026 Monthly Volume
| Platform | July 2026 | MoM change | Share |
|---|---|---|---|
| Kalshi | ~$37.7B | — | 74.5% |
| Polymarket (Global) | $7.9B | −26% | 15.6% |
| Polymarket US | $5.0B | +54% | 9.9% |
| Total | $50.6B (all-time record) | — | 100% |
Source: The Block Data (updated 2026-08-02). The Kalshi figure is derived by subtracting the two Polymarket entities from The Block's published aggregate; it is not individually disclosed in the original.
1.2 Year-by-Year Total Market Volume
| Period | Volume | Note |
|---|---|---|
| 2023 | Polymarket $73M | Polymarket only |
| 2024 | Polymarket ~$9B | US presidential election effect |
| 2025 | $51B | Whole market (Bernstein) |
| Jan–Apr 2026 | $60B | Kalshi + Polymarket combined, already exceeding full-year 2025 |
| July 2026 | $50.6B / month | Combined across three platforms |
1.3 Monthly Volume Trend by Platform
| Period | Polymarket | Kalshi |
|---|---|---|
| Dec 2024 | — | $226M |
| Oct 2025 | $3.02B | $4.39B (first crossover) |
| Dec 2025 | $5.31B | $6.58B |
| Jan 2026 | $7.66B | $9.16B |
| Feb 2026 | — | over $10B |
| Mar 2026 | $10.57B (record at the time) | ~$13B |
| May 2026 | $8.9B | — |
| Jun 2026 | $10.7B | $29.2B |
| Jul 2026 | $7.9B | ~$37.7B |
Kalshi overtook Polymarket starting September 2025 and has widened the gap since. Of Kalshi's $29.2B in June 2026 volume, roughly $7B came from the FIFA World Cup and roughly $7B came from newly launched fee-free crypto perpetual futures (per Sacra's tally).
1.4 Valuation and Revenue
| Company | Valuation | Date | Revenue |
|---|---|---|---|
| Kalshi | $22B (Series F, $1B round led by Coatue) | 2026-05-07 | Over $1.5B annualized (company disclosure, Bloomberg) |
| — Prior round | $11B (Series E, $1B round led by Paradigm) | 2025-12 | 2025 revenue $263M (CB Insights) |
| — Cumulative raised | ~$2.8–2.9B | — | — |
| Polymarket | $9B (post ICE investment) | 2025-10 | Effectively $0 through 2025 |
| — In progress | Raise of $400M targeting a $15B valuation (Bloomberg) | 2026-04 | Fee rollout in 2026 |
| ICE investment | $2B total (initial $1B + additional $600M on 2026-03-27) | Completed | ~17% equity stake, 11% on a fully diluted basis |
1.5 Institutional Outlook
| Institution | Metric | Outlook |
|---|---|---|
| Bernstein (Gautam Chhugani) | Volume | $240B in 2026, $1T by 2030 (~80% CAGR) |
| Bernstein | Revenue | ~$400M in 2025 → $2.5B in 2026 → $10.8B by 2030 |
| Bernstein | Sports share | 62% currently → 31% by 2030 |
| Citizens Financial Group | Revenue | Over $10B by 2030 (5x current levels) |
| Bank of America (Julie Hoover) | — | Classifies Kalshi as one of "the fastest-growing non-AI companies in the US." Weekly volume grew from $100M to $3B in a single year |
2. Distribution of Growth — Where Has It Flowed?
2.1 Robinhood Q2 2026 Results (reported 2026-07-29)
| Item | Q2 2026 | YoY |
|---|---|---|
| Total net revenue | $1.31B (record) | +32% |
| Transaction-based revenue | $776M | +44% |
| Options | $342M | +29% |
| Event contracts | $156M | 10x+ |
| Equities | $129M | +95% |
| Crypto | $100M | −38% |
| Net income | $573M | +48% |
| Adjusted EBITDA | $741M (57% margin) | — |
| Event contract volume | 13.6B contracts (Q1: 8.8B) | 1B a year ago |
| Rothera contribution | $17M (of the $156M) | Live since June 2026 |
For the first time in Robinhood's history, event-contract revenue exceeded crypto revenue. It also exceeded equities revenue.
Rothera is a joint exchange/clearinghouse between Robinhood and Susquehanna International Group, built on the January 2026 acquisition of MIAXdx (a CFTC-designated DCM, DCO, and SEF). It has cleared more than 3.5 billion contracts cumulatively.
2.2 CFTC License Acquisitions
| Exchange | DCM Designation | Acquirer | Date | Note |
|---|---|---|---|---|
| QCX / QCEX | 2025-07 | Polymarket | 2025-10 | $112M. DCM + DCO |
| Railbird | 2025-06 | DraftKings | 2025-10 | Operated as DKeX |
| MIAXdx | Pre-existing | Robinhood + SIG | 2026-01 | DCM + DCO + SEF |
| Aristotle | 2025-09 | Underdog | 2026-03 | DCM + DCO |
2.3 The Sportsbook Camp Moves In
| Operator | Status | Confirmed figures |
|---|---|---|
| DraftKings Predictions | 38 states (17 for sports) | April annualized volume $2.3B; customer acquisition cost down over 80% |
| — Railbird's own listings | Sports contracts filed for listing since 2026-05-27 | Football, basketball, baseball, hockey, golf, MMA, motorsport, soccer, tennis |
| — H2 2026 investment plan | $200–300M | Company disclosure |
| FanDuel Predicts | 50 states (18 for sports), CME joint venture | Launched 2025-12-22 |
| — Flutter investment plan | ~$300M | Company disclosure |
DraftKings and FanDuel together control roughly 85% of the US$30B sports-betting market, yet their sportsbook licenses cover only about 38 states. The federal CFTC license, by contrast, claims a single application across all 50 states. Event contracts also are not subject to state gaming tax, and their minimum age is 18 (vs. 21 for sportsbooks).
2.4 On-Chain Competitors (April 2026 taker volume)
| Platform | Chain | Volume |
|---|---|---|
| Predict.fun | BNB Chain | $579M |
| Opinion | — | $376M |
| Limitless | Base | $205M |
The combined 30-day global market share of Kalshi and Polymarket stood at about 88% as of April 2026.
3. Polygon Dependence — Figures Over Time
Polymarket has run on Polygon PoS since its 2020 launch. Its collateral token switched from USDC.e to pUSD (a Polygon ERC-20 token backed 1:1 on-chain by USDC) on April 28, 2026.
3.1 Polymarket's Share Within the Polygon Network
| Date | Metric | Value | Source |
|---|---|---|---|
| 2025-01 | Polymarket TVL | $172M | CoinGecko |
| 2025 annual average | Polygon monthly transactions | 119M | CoinGecko |
| 2025 annual average | Polygon monthly active users | 7.4M | CoinGecko |
| 2025-12 | Polygon monthly transactions | 116M | CoinGecko |
| 2026-01-05 | Polymarket introduces fees on crypto markets | Starting with 15-minute contracts | Polymarket |
| 2026-01 | Polygon weekly fees | $1.1M (highest since Nov 2024) | TokenTerminal |
| 2026-01 | Polygon daily transactions | 5.3M (~2x early-2025 level) | — |
| 2026-01-13 | Cumulative 2026 Polygon fees | Over $1.7M, led by Polymarket's 15-minute markets | Coinpedia |
| End of Jan 2026 | Polymarket TVL / Polygon network TVL | $375M / $1.17B = 24.3% | CoinGecko |
| 2026-02 | Polygon monthly transactions | 204M (record at the time) | CoinGecko |
| 2026-03 | Polymarket share of Polygon gas usage | Over 77% | Dune Analytics |
| 2026-03 | Polymarket share of total Polygon transactions | Over 54% | Dune Analytics |
| 2026-03 | Prediction-market sector monthly transactions | 191M (+2,838% YoY) | Dune Analytics |
| 2026-04 | Polymarket's share of Polygon's 24-hour fees | $860K of $1.18M = ~73% | Cryptopolitan |
| 2026-04 | Polymarket's weekly Polygon fees | $2.5–4.0M = 50–70% of the entire chain | — |
| 2026-04 | 24-hour fees of #2 app (Courtyard) | $182K | Cryptopolitan |
| Q2 2026 | Polygon quarterly transactions | 743M (record, +160% YoY) | Blockworks / Polygon Labs |
| Q2 2026 | Polygon daily transactions | ~7.5M | — |
| Q2 2026 | Polymarket TVL | $391M (largest single app in Polygon DeFi TVL) | DefiLlama |
| Q2 2026 | Total Polygon DeFi TVL | ~$916M | DefiLlama |
3.2 Key Takeaways
- Fee-based dependence (50–77%) is consistently higher than transaction-based dependence (54%). This means Polymarket transactions are more gas-intensive than the Polygon average. This gap has widened since the January 2026 introduction of high-frequency 15-minute crypto markets.
- Polygon's record transaction volume in Q2 2026 is not attributable to Polymarket alone. Over the same period, Polygon also grew rapidly through stablecoin settlement (198M stablecoin transactions in a single month, May 2026, transferring $79.25B, ranking #1 by transaction count across all chains). Accordingly, the 54% transaction-share figure from March cannot simply be carried forward to Q2.
- On a TVL basis, the share moved from 24.3% (Jan 2026) while the absolute figure grew to $391M. Polymarket retains its status as the single largest application in Polygon's DeFi TVL.
4. Fee and Revenue Structure (2026)
Polymarket charged no trading fees from its 2020 launch through the end of 2025.
| Date | Action |
|---|---|
| 2026-01-05 | Introduced taker fees on 15-minute crypto contracts |
| 2026-02-18 | Introduced fees on sports markets |
| 2026-03-06 | Expanded to all crypto time frames |
| 2026-03-30 | Expanded to all categories except geopolitics/world events |
| 2026-04-03 | Polymarket US fee schedule takes effect |
| 2026-07 | Sports rate 0.03 → 0.05; crypto 0.072 → 0.07 |
Fee formula: fee = number of contracts × feeRate × price × (1 − price). The fee is maximized at a 50% probability and converges to zero toward the extremes. Makers pay zero fees and receive rebates.
| Category | feeRate |
|---|---|
| Crypto | 0.07 |
| Sports | 0.05 |
| Economics / Culture / Weather / Other | 0.05 |
| Finance / Politics / Tech / Mentions | 0.04 |
| Geopolitics / World events | 0 |
| Polymarket US (flat) | 0.05, maker rebate −0.0125, capped at $1.25 per 100 contracts at 50¢ |
Fee distribution: by category, 20% (crypto), 25% (most categories), or 50% (finance) is allocated to the maker rebate program; the referral program pays out 30% direct and 10% indirect.
Revenue estimates (third-party)
| Source | Estimate |
|---|---|
| Pine Analytics (2026-03) | Daily gross fees $1.2M, net revenue $573K, ~$209M annualized (based on daily taker volume of $160M) |
| Polyguana (2026-04) | Daily $0.8–1.0M, ~$300M annualized (based on 30-day volume of $9.55B) |
Kalshi's effective take rate is roughly 1%, higher than Polymarket's. This explains the gap between Kalshi's revenue (over $1.5B annualized) and Polymarket's estimated revenue (an estimated $200–300M annualized).
ICE's data business. In February 2026, ICE launched "Polymarket Signals and Sentiment," which normalizes real-time trading data from Polymarket contracts into ICE's entity-identification and reference-data infrastructure and distributes it via the ICE Consolidated Feed — the same kind of infrastructure used to distribute NYSE stock quotes.
5. Legal Regulation Across Major Jurisdictions
5.1 United States — Accommodated as Federal Derivatives Regulation, in Conflict with States
| Date | Party | Content |
|---|---|---|
| 2022 | CFTC | Fined Polymarket $1.4M and excluded it from the US market |
| 2024 | D.C. federal district court | Kalshi's congressional-control contracts are not "gaming" under Rule 40.11 |
| 2025-01-24 | Kalshi | Launches sports event contracts |
| 2025-08-01 | Maryland federal district court | Denies Kalshi's injunction request. Federal field preemption does not automatically nullify state gambling law |
| 2025-12 | Senate | Confirms Michael Selig as CFTC Chair |
| 2026-01 | MA Suffolk Superior Court | Rules against Kalshi. Injunction effective 3/8 (later stayed by the appellate court) |
| 2026-02-19 | US District Court, Middle District of Tennessee | Rules for Kalshi |
| 2026-03-17 | State of Arizona | Files 20 criminal counts against Kalshi |
| 2026-04-02 | CFTC | Sues Arizona, Connecticut, and Illinois, seeking a declaration of exclusive jurisdiction |
| 2026-04-06 | Third Circuit Court of Appeals | Rules 2-1 for Kalshi: sports event contracts are swaps under the CEA, and the CEA preempts New Jersey gambling law. First appellate-level ruling on the issue |
| 2026-04-16 | Ninth Circuit Court of Appeals | Consolidated oral argument in Kalshi/Robinhood/Crypto.com v. Nevada |
| 2026-06-10 | CFTC | Publishes a 267-page Notice of Proposed Rulemaking (NPRM) on event contracts, substantively amending Rule 40.11 and distinguishing permitted from prohibited categories |
- 34 states plus Washington DC and the Northern Mariana Islands filed an amicus brief asserting state regulatory authority
- The Third Circuit ruling addressed a preliminary injunction, not a decision on the merits
- No IRS guidance exists; Kalshi does not issue Form 1099-B
- The current CFTC leadership has not initiated a single Rule 40.11 review
5.2 Korea — Treated as a Crime
To state the conclusion up front: Korea treats prediction markets like Polymarket as a crime. This has moved past the administrative stage of blocking access and into criminally charging individual users.
| Date | Party | Content |
|---|---|---|
| 2026-05 | Korea Communications Standards Commission (KCSC) | Opens deliberation into Polymarket's speculative/illegal nature |
| 2026-06 | Gangwon Provincial Police, Cyber Investigation Unit, Cybercrime Investigation Team | Acting on a referral from National Police Agency headquarters, charges domestic users with the crime of gambling and conducts suspect interviews. Identifies users nationwide by tracing crypto-asset transaction records |
| 2026-07-06 | KCSC | Grants Polymarket an opportunity to present its position; plans to review materials and deliberate/resolve on corrective measures such as access blocking |
| Late Jul 2026 | Polymarket | Discontinues its Korean-language service. Domestic access now defaults to the English-language page; Korea-related markets are excluded from search and recommendations. The global site remains available |
| Ongoing | National Police Agency | Extends its special cyber-gambling crackdown to 2026-10-31. From 2024-11-01 to 2025-10-31, the crackdown resulted in 3,544 cases, 5,196 arrests, and 314 detentions |
Legal basis
| Element | Application |
|---|---|
| Criminal Act Art. 246 (Gambling) | An act in which gains or losses of property or a proprietary benefit are decided by chance |
| Standard for "chance" | Supreme Court, March 22, 1983, 82Do2151 — "Even if a party's skill affects the outcome, it still constitutes gambling as long as it is at all subject to the influence of chance" |
| Art. 246(1) proviso | Exception for conduct amounting to no more than momentary amusement |
| Art. 246(2) | Habitual gambling — repeated or high-stakes conduct can carry a prison sentence |
| Art. 3 (personal jurisdiction principle) | Korean criminal law applies to Korean nationals even when the server/operator is located abroad |
The KCSC has stated its review criterion as "whether the service is offered in Korean and targets domestic users for business." Polymarket's discontinuation of its Korean-language service has been reported as a response tailored to this criterion.
Institutional background — why the "financial product" framing doesn't hold
| Layer | Content |
|---|---|
| Capital Markets Act Art. 4(10) | The definition of a derivative's underlying asset includes "risks belonging to natural, environmental, or economic phenomena, etc., for which price, interest rate, indicator, or unit calculation or valuation is possible by a reasonable and appropriate method" |
| Capital Markets Act Art. 373 | Prohibits establishing an unlicensed financial investment product market. Establishing an exchange-traded derivatives market requires an exchange license |
| National Sports Promotion Act | State monopoly on sports-promotion vouchers (Sports Toto) |
| Korea Racing Authority Act / Cycle & Motorboat Racing Act / Lottery Act | Each grants a monopoly under its own dedicated statute governing that specific speculative activity |
| Regulation of Speculative Businesses Act | Imposes an aggregate revenue cap on the speculative-business industry |
Hwang Se-woon, a senior research fellow at the Korea Capital Market Institute, stated that "it would be quite difficult to gain recognition as a derivative product domestically" (Weekly Kyunghyang, 2026-07-28).
As of August 2026, there is no domestic case law in which someone has actually been punished for using Polymarket. The outcome of the ongoing investigation is set to become the first such case.
5.3 Japan — A Crime Under the Penal Code, but Active Lobbying for Approval by 2030
| Item | Content |
|---|---|
| Legal basis | Penal Code Art. 185 (simple gambling) and Art. 186 (habitual gambling and operating a gambling house) |
| Exceptions | Public sports (horse racing, keirin, boat racing, auto racing), lottery, IR casinos (early-stage, under strict regulation) |
| National Police Agency's position | Online gambling within Japan is a crime even if the operator is based abroad |
| Access to Polymarket | As of June 2026, reports of front-end geoblocking applied to Japanese IPs (StartPolymarket, 2026-06-14). Prior reporting as of May indicated it remained unblocked |
| 2026-05-22 | Bloomberg reports Polymarket has appointed a representative to enter the Japanese market, targeting regulatory approval by 2030. The Japan business is headed by Mike Eidlin, formerly Jupiter's Japan lead |
| Polymarket's comment | "There has been meaningful organic interest from Japanese users" |
| Domestic workaround service | POYP — a points-based prediction service that excludes cash betting, using a structure similar to pachinko's indirect prize-exchange model to avoid triggering gambling law |
| Taxation | Crypto-asset gains/losses are treated as miscellaneous income, taxed up to 55% (including local tax). A planned 2026 tax reform would introduce a 20% separate flat tax for eligible crypto-assets on registered exchanges |
Japan's regulatory intensity is similar to Korea's, but it is the only major Asian country where an operator has begun publicly lobbying for formal approval. The 2030 target date itself signals just how difficult that path is.
5.4 Hong Kong — No Explicit Ban, but Regulators Warn of Possible Illegal Gambling
| Item | Content |
|---|---|
| Legal basis | Gambling Ordinance (Cap. 148). Section 8, "betting with a bookmaker," is a crime regardless of whether it occurs online or offshore |
| Legal speculative activity | Hong Kong Jockey Club (HKJC) monopoly — horse racing, football betting, Mark Six |
| 2026-04-17 | Statement by the Investor and Financial Education Council (IFEC), under the SFC — trading on prediction markets such as Polymarket and Kalshi may constitute illegal gambling. Participants do not receive Securities and Futures Ordinance (SFO) protection and have no recourse; these contracts are not investment products |
| 2026-03-24 | Hong Kong Police |
| Legal community view | Because prediction markets are a P2P derivatives exchange in which no central bookmaker holds funds, it is unclear whether they meet the traditional definition of a bookmaker (attorney Gordon Chan, SCMP) |
| Access blocking | None. Polymarket remains normally accessible |
| License application pathway | None. Because of the HKJC monopoly structure, no license category for online prediction markets exists at all |
| Crypto-asset regulation | SFC's VATP licensing regime (effective 2023-06); 12 platforms formally licensed as of February 2026 |
| Taxation | No capital gains tax. However, a 16.5% profits tax applies if classified as business activity |
| Note | Hong Kong's Home and Youth Affairs Bureau shelved consideration of legalizing basketball betting, citing the influence of prediction-market platforms as a factor |
5.5 Singapore — Access Blocked, With an Explicit Criminal Basis
| Item | Content |
|---|---|
| 2025-01-12 | The Gambling Regulatory Authority (GRA) ordered ISPs to block Polymarket, calling it "an illegal gambling site operated by an unlicensed gambling provider" |
| Legal basis | Gambling Control Act 2022 |
| Penalty | A fine of up to SGD 10,000, imprisonment of up to 6 months, or both. Attempting to circumvent the block is also covered |
| Scale of enforcement | Over 3,800 gambling sites blocked as of early 2026; $37M in transactions blocked as of 2025-12-31 |
| Joint statement (GRA, IMDA, Police) | "There is no perfect method of blocking" — acknowledging the limits of circumvention |
| Actual usage | Despite the block, more than $100K a day was wagered on Singapore-related markets as of April 2026; roughly $720K accumulated on the 2025 general-election market |
| Regulatory arbitrage | Financial products regulated by MAS are not treated as gambling. Event-contract trading through a regulated broker such as Interactive Brokers remains accessible to Singapore residents |
Singapore treats the same underlying economic activity differently depending on the channel: the regulated-broker channel is permitted, while blockchain-based platforms are banned. This suggests regulatory concern is directed less at the concept of an event contract itself and more at decentralized, crypto-based infrastructure.
5.6 Europe — Dual Regulation Under Gambling Law and Financial Law
(1) Financial regulation track — ESMA
| Date | Content |
|---|---|
| 2018 | ESMA implements a ban on marketing binary options to retail clients (later transposed into national law by member states) |
| 2026-07-03 | ESMA statement confirming that event contracts with binary payoffs / fixed settlement structures fall under MiFID II financial instruments, and that the existing binary-options ban applies to them. The first official EU financial-regulator position on prediction markets |
| Effect | Not a new ban, but a confirmation of the existing ban's scope: "marketing, distribution, and sale to retail clients of event contracts that meet the definition of a financial instrument is prohibited" |
| Implication | Member-state regulators can enforce across all 27 countries without needing to prove illegal gambling — proving the provision of a binary derivative is sufficient |
| Additional note | Distribution to professional investors/institutions also requires authorization |
(2) Gambling regulation track — enforcement by member state
| Country | Action |
|---|---|
| France | ANJ formally notified Polymarket operator Adventure One QSS Inc. in November 2024 → geoblocked financial transactions → ordered a full ISP block on 2026-07-16. Grounds: 578,751 visits and 205,057 unique visitors in June alone promoting illegal gambling |
| Spain | Ordered ISPs to block both Polymarket and Kalshi simultaneously on 2026-05-26 |
| Netherlands | KSA issued a cease order in Feb 2026 for violating the Remote Gambling Act, upheld on appeal, with recurring penalty payments for non-compliance |
| Belgium | Placed on the Gaming Commission's official blacklist — one of Europe's longest-running enforcement cases |
| Germany | GGL publicly warned that participation is illegal, and opened a formal investigation into ADI Predictstreet's World Cup marketing and unlicensed operations (that platform now geoblocks German IPs) |
| Other blocking/restricting countries | Italy, Poland, Portugal, Romania, Hungary, Greece, Czechia, Bulgaria, Switzerland, Ukraine, UK |
| 2026-06 | Regulators from nine countries (Belgium, France, Germany, Italy, Netherlands, Poland, Portugal, Spain, Switzerland) launch a joint enforcement initiative |
(3) Regulatory accommodation track — Gibraltar
| Date | Content |
|---|---|
| 2026-03-26 | ADI Predictstreet obtains the first license as a betting intermediary under the old Gambling Act 2005 |
| 2026-07-13 | The Prediction Market Regulations 2026 take effect — the world's first dedicated regulatory framework (24 pages) carving prediction markets out as a separate license category under the Gambling Act 2025 |
| Regulatory content | Requires regulator certification for all event contracts, imposes market-manipulation and insider-trading surveillance obligations on operators, and bans contracts tied to criminal acts, death, terrorism, and war |
| Licensees | ADI Predictstreet (official FIFA 2026 World Cup prediction-market partner, built on ADI Chain), Wire Markets by WagerWire |
| Limitation | Gibraltar sits outside the EU single market. Per ESMA's clarification, binary event contracts referencing a MiFID II underlying are barred from EU retail sale regardless of Gibraltar/Malta licensing or MiCA licensing |
(4) Where MiCA fits
MiCA regulates crypto-asset service providers (custody, transfer, trading, issuance), but it does not itself classify prediction-market contracts. Whether a given contract is gambling or a financial instrument is left to individual member states, and member states disagree. In effect, an operator must pass two simultaneous tests: (a) is this a bet under national gambling law, and (b) is this a derivative under MiFID II — and both determinations can hold true at once.
As of August 2026, no prediction-market operator holds a retail license anywhere in the EU.
5.7 Other Jurisdictions
| Country | Action |
|---|---|
| Taiwan | First country to block. 17 people arrested over presidential-election betting; election law explicitly bans betting on election outcomes |
| Thailand | Police ordered an ISP block in January 2025; crypto betting is explicitly illegal under gambling law |
| Indonesia | Classified as a variant of online gambling and access-restricted. OJK froze more than 33,000 gambling-linked accounts as of April 2026 |
| Vietnam | Decree 147/2024 removes unlicensed gambling apps from app stores; a September 2025 central-bank resolution restricts legal crypto-asset trading to domestically issued, VND-denominated tokens |
| India | Crackdown on prediction markets; Polymarket service discontinued |
| Australia | Blocked |
| Brazil | National Monetary Council blocked Polymarket plus 26 other prediction sites in April 2026; the licensed sportsbook industry is lobbying ahead of the October presidential election |
| Argentina | Buenos Aires court ordered ENACOM to block nationwide access on 2026-03-16; LOTBA has filed suit |
| Canada | Accessible outside Ontario |
As of August 2026, Polymarket restricts more than 40 jurisdictions, most of which only ban opening new positions while allowing existing positions to be closed out. Full blanket blocks are reserved for sanctioned regions such as Iran, North Korea, and Cuba.
5.8 Jurisdiction Comparison Summary
| Jurisdiction | Classification | Access | User criminal risk | Operator license path |
|---|---|---|---|---|
| United States | Federal derivative (CFTC) | Available | None (when using a federally regulated exchange) | Yes — DCM/DCO/FCM |
| Gibraltar | Dedicated regulatory category | Available | None | Yes — world's first dedicated regime |
| Hong Kong | Unclassified, warned of possible illegal gambling | Available | Uncertain | None |
| Japan | Gambling under the Penal Code | Geoblocked (per 2026-06 reports) | Yes | None (lobbying toward a 2030 goal) |
| Korea | Gambling under the Criminal Act — investigation ongoing | Available (no block imposed) | Yes — actual charges and summons | None |
| Singapore | Unlicensed gambling | Blocked | Yes (explicit fines/imprisonment) | None (regulated-broker channel is an exception) |
| EU | Dual gambling + MiFID II | Varies by country | Varies by country | None (zero retail license holders) |
6. Perspective and Approach for Korean Blockchain Startups
6.1 Four Facts to Accept First
(1) A domestic B2C prediction market is legally impossible. The Capital Markets Act's ban on unlicensed market establishment, the state monopolies under dedicated speculative-activity statutes such as the National Sports Promotion Act and the Korea Racing Authority Act, and the aggregate revenue cap imposed by the Regulation of Speculative Businesses Act all overlap. This is not a matter of regulatory attitude — the license category simply does not exist. The US already had a vessel to put this into, the CFTC; Gibraltar built a new vessel. Korea has neither.
(2) The "just do it offshore" strategy is running out of runway. Singapore in January 2025, Spain in May 2026, France in July 2026, a joint nine-country enforcement action in June 2026, the ESMA statement in July 2026 — Polymarket now restricts more than 40 jurisdictions. Unlicensed offshore operation was a viable strategy in 2024; it is not in 2026.
(3) On-chain is not a prerequisite for success in this market. Kalshi, which accounted for 74.5% of volume in July 2026, does not use a blockchain at all. Robinhood's $156M in event-contract revenue is likewise not on-chain. A blockchain startup that starts from the premise "we win because we're on-chain" runs headlong into the market data.
(4) A license is now an M&A asset. QCEX for $112M (Polymarket), Railbird (DraftKings), MIAXdx (Robinhood + SIG), Aristotle (Underdog). For a Korean startup, obtaining a fresh CFTC DCM license from scratch to enter the US market is not realistic in terms of either capital or time. What can be built is not the license itself but the software that sits on top of it.
6.2 Viable Approach Paths
| Path | Description | Domestic legal risk | Reference case |
|---|---|---|---|
| A. Infrastructure/middleware B2B | Supply order-book engines, risk engines, market-making bots, and settlement systems to licensed operators abroad | None (software supply) | Susquehanna's Rothera joint venture |
| B. Oracle / outcome resolution | Trustworthy outcome resolution is a structural weak point of this industry. Dispute-minimizing resolution systems and data-source verification | None | UMA Optimistic Oracle |
| C. Data / signals | Normalizing, distributing, and analyzing probability data. Handling only data, with no betting function | Low (if no betting is offered) | ICE Polymarket Signals and Sentiment |
| D. Compliance tech | Jurisdiction-specific geoblocking, KYC/AML, market-manipulation and insider-trading surveillance. Demand emerged after Gibraltar's regulation imposed a surveillance obligation on operators | None | Gibraltar's regulatory requirements |
| E. Non-cash structures | Points/prediction games that exclude cash wagers, avoiding the application of gambling law | Low (depends on structural design) | Japan's POYP |
| F. Direct entry into licensed jurisdictions | Gibraltar prediction-market license, US FCM/IB registration | Requires a foreign entity; domestic marketing would fall under KCSC review | ADI Predictstreet, WagerWire |
| G. Domestic B2C prediction market | — | Criminal risk. Not recommended | — |
6.3 The Actual Market-Size Basis for Each Path
- A & B (infrastructure): Four exchange acquisitions occurred in H1 2026 alone, and DraftKings and Flutter have each announced $200–300M investment plans. Demand for software to run atop these acquired licenses arrives together with this capital.
- C (data): ICE's stated rationale for its $2B investment is distribution rights to the data. Bernstein has identified distribution channels as the industry's key moat.
- D (compliance): Gibraltar's regulations explicitly impose market-manipulation and insider-trading surveillance obligations on operators. The joint nine-country European enforcement action and the ESMA statement are creating demand for automated jurisdiction-by-jurisdiction blocking and screening.
- E (non-cash): Japan's POYP is an actual, currently operating workaround structure. Whether this structure would be safe under Korea's Regulation of Speculative Businesses Act, however, requires a separate, individualized legal review.
6.4 Execution Checklist
| Item | What to Verify |
|---|---|
| Corporate domicile | A Korean company supplying software to an offshore prediction market is entirely different from a Korean company operating a prediction market |
| Korean language / domestic marketing | The KCSC's review criterion is "Korean-language service and business targeting domestic users." Even Polymarket dropped Korean |
| Acquiring domestic users | Potential exposure to accessory/aiding-and-abetting liability. Users themselves are already being charged |
| Fund flows | The path from domestic exchange → offshore prediction market via USDC transfer is becoming a target of crypto-asset transaction tracing |
| Contract design | Binary payoff structures run into the EU's MiFID II binary-options ban. The payoff structure itself is a regulatory trigger |
| Prohibited categories | Gibraltar has banned contracts tied to criminal acts, death, terrorism, and war. This direction could become a global standard |
| Partner due diligence | Which jurisdiction's license the counterparty holds, and whether that license actually covers retail sales |
6.5 Summary
For Korean blockchain startups, the prediction-market industry is a market to supply, not a market to compete in.
The demand side is clear: a projected $240B in volume for 2026, a $1T outlook by 2030, and four exchange acquisitions plus investment plans worth hundreds of millions of dollars announced in H1 alone. But that demand concentrates around licensed, regulated operators, and Korea has no license category to begin with.
What a Korean team can therefore capture is the layer that doesn't require a license but that licensed operators must buy anyway — matching engines, oracles, risk management, surveillance systems, and data pipelines. These overlap substantially with the tech stack of crypto-exchange infrastructure and align well with Korean teams' existing capabilities.
By contrast, the approach of "build an on-chain prediction market and gather global users" is close to unexecutable on the 2026 regulatory map. More than 40 jurisdictions have shut it out, all 27 EU countries have banned retail sales via the ESMA statement, and most major Asian countries either block it or treat it as a criminal matter.
Appendix: Sources
Volume and market data
- The Block Data Dashboard (updated 2026-08-02)
- Dune Analytics — Polymarket on-chain data, Polygon gas/transaction share
- DefiLlama — Polygon DeFi TVL
- CoinGecko, "Polygon Ecosystem Report" (2026-03-25)
- Cryptopolitan, "Polygon hits 743 million transactions in Q2 2026" (2026-07-02)
- Coincheck Onchain Report (2026-04-25)
- Sacra — Polymarket / Kalshi revenue and volume tracking
- Arkham Intelligence — analysis of World Cup trading, June 2026
Outlook
- Bernstein (Gautam Chhugani), 2026-04-14
- Citizens Financial Group, 2025-12-15
- Bank of America (Julie Hoover)
- Pine Analytics, "Polymarket Fee Rollout" (2026-03)
Corporate disclosures and press coverage
- Robinhood Markets Q2 2026 results (2026-07-29)
- Intercontinental Exchange IR (2026-03-27)
- Kalshi Series F announcement (2026-05-07), Bloomberg / TechCrunch
- Polymarket Help Center, "Exchange Upgrade: April 28, 2026"
- Josh Stevens (Polymarket VP of Engineering, DeFi), X post (2026-04-24)
- Bloomberg, coverage of Polymarket's Japan entry (2026-05-22)
Legal — United States
- Paul Weiss (2026-04-06), Holland & Knight (2026-02, 2026-04)
- Epstein Becker Green, "Prediction Markets v. State Gaming Laws"
- Congressional Research Service LSB11441 (2026-06)
- DarrowEverett LLP (2026-05)
Legal — Europe
- ESMA, "ESMA reminds firms of existing rules and obligations under binary option measures" (2026-07-03)
- ANJ access-blocking order (2026-07-16), iGaming Business / Public Gaming Research Institute
- Gibraltar Prediction Market Regulations 2026 (2026-07-13)
- FinTelegram (2026-07), European Gaming (2026-05, 2026-07)
Legal — Asia
- Hankyung/Blooming Bit, "Gangwon Provincial Police opens summons investigation of domestic Polymarket users" (2026-06-05)
- Hankyung/Blooming Bit, "KCSC opens deliberation of Polymarket" (2026-05-21)
- Hankyung/Blooming Bit exclusive, "Polymarket abruptly discontinues Korean-language service" (2026-07-31)
- Weekly Kyunghyang (2026-07-28)
- Supreme Court of Korea, March 22, 1983, 82Do2151
- SFC/IFEC statement (2026-04-17), The Standard / AGB
- Hong Kong Free Press (2026-04-11)
- Singapore GRA blocking action (2025-01-12), CoinMarketCap / The Defiant
- CoinDesk, "Polymarket aims for prediction market approval in Japan by 2030" (2026-05-22)
This document is provided for informational purposes only and does not constitute investment or legal advice. Use of prediction markets carries criminal exposure depending on jurisdiction; in Korea, an investigation of users for the crime of gambling is currently ongoing.