Prediction Markets Navigate Legal Hurdles in Asia’s Major Economies

Prediction markets are expanding into Asia’s largest economies, but unclear legal definitions and strict gambling laws may limit their growth. The sector faces regulatory challenges similar to those encountered by the broader crypto industry. Asia’s major economies, including China, Japan, and India, present a unique combination of scale, active retail participation, and limited local alternatives, making them attractive despite regulatory risks. This mirrors the crypto industry’s trajectory, where platforms often entered markets before clear regulatory frameworks were established. Polymarket, a leading prediction market platform, has introduced Chinese-language support and is recording over $1 billion in weekly volume. However, the region’s fragmented legal landscape and access issues complicate the industry’s global ambitions. Three Asian countries — China, Japan, and India — ranked among the world’s five largest economies by gross domestic product in 2024, according to the World Bank. India and China lack specific frameworks for blockchain-based prediction markets but maintain restrictive environments for crypto activities. India imposes heavy taxation, while China enforces an outright ban on trading and mining. South Korea, another major economy, is known for its active retail crypto market and ranks 12th globally in GDP. The South Korean won is a top-two currency by global fiat trading volume, according to Kaiko. Despite these challenges, some platforms are attempting to localize content to drive adoption. PredicXion, an Asia-based platform, focuses on region-specific events to appeal to local audiences. However, founder and CEO Andy Cheung highlighted that local gambling regulations remain a significant concern. In China, online gambling is strictly prohibited, and access to platforms like Polymarket is largely restricted. Some users bypass these controls using virtual private networks (VPNs), but this does not eliminate legal risks. Regulators in South Korea and Japan have yet to directly address blockchain-based prediction markets, but both countries maintain strict limits on gambling. Authorities in South Korea have pursued illegal online betting operators and, in some cases, users themselves. Japan’s approach is similarly restrictive, with most forms of gambling prohibited for locals outside state-run exceptions. The legal uncertainties and regulatory risks pose challenges for prediction market operators and users in these regions.