Author: Chloe, ChainCatcher
Last week, the prediction market went dark in India. Users connecting to polymarket.com were greeted only by a "This site can't be reached" error message. The Ministry of Electronics and Information Technology (MeitY) had issued a blocking order, instructing domestic internet service providers to cut off access on the grounds that India has classified the platform as "online money gaming," a completely prohibited category.
On the very same day, Bloomberg cited insiders disclosing that Polymarket has appointed a local representative in Japan and is preparing to lobby for the "legalization of prediction markets," aiming to secure government approval by 2030.
This simultaneous advance and retreat precisely describes Polymarket's current situation. While the prediction market continues to grow in size, regulatory hurdles in various countries are making progress difficult.
Three Regulatory Approaches Reveal How Countries View Prediction Platforms
Polymarket's expansion has spread virally across nations due to its "permissionless" onboarding approach. This decentralized architecture has allowed it to reach about 180 countries, but this is exactly what regulators see as the problem. The lack of identity verification means bypassing anti-money laundering (AML) norms; operating outside traditional financial institutions means circumventing gaming licenses and derivatives regulations.
As of early 2026, Polymarket's own documents listed around 33 restricted countries and regions, spanning six continents, with the number growing every month or two. Looking at regulatory actions by country, they can roughly be categorized into several types.
The first is direct blocking.
India is the latest and most dramatic case. It acted based on the "Promotion and Regulation of Online Gaming Act, 2025" (PROGA). This law, passed by both houses of Parliament and signed by the President in August 2025, took effect on May 1, 2026, listing prediction markets alongside online money gaming as completely prohibited.
Notably, the execution of this blockade was anything but clean and swift. After the ban took effect, Polymarket and its competitor Kalshi did not quietly exit. Instead, they continued to allow Indian users to register and trade through "mirror sites" (copies of the original site with identical content but hosted on different URLs and servers). The Ministry of Electronics and Information Technology sent a letter to VPN operators on April 25, warning that users were still accessing "illegal and blocked prediction market and online gaming platforms," but this warning still could not curb user frenzy. It was only after a formal blocking order invoking Section 69A of the Information Technology Act was issued that Polymarket truly went dark in India.
Even so, India remains one of Polymarket's largest user bases, with people continuously using VPNs and overseas cryptocurrency channels to bypass ISP blocks, although accessing or funding from within India remains illegal.
Brazil's blockade was even more sweeping. In late April 2026, Brazil's National Monetary Council (CMN) issued Resolution No. 5,298, prohibiting derivative contracts with non-economic events (sports, politics, elections, culture, entertainment) as underlying assets, blocking about 27 to 28 prediction platforms at once, including Polymarket and Kalshi. This was enforced by the telecom regulator Anatel shutting down the domains.
Treasury official Dario Durigan described these platforms as "gambling disguised as financial instruments" and partly attributed rising household debt to unregulated online gaming. Brazil thus became the third Latin American country, after Argentina and Colombia, to restrict prediction markets.
Ukraine's ban carries unique moral considerations. In December 2025, Ukraine implemented a nationwide blockade on the grounds that the platform accepted bets on events related to the Russia-Ukraine war. In November 2025 alone, there were 97 bets on the Russia-Ukraine war on the platform, totaling $96.8 million. Betting on the timing of a city's fall in an ongoing war became a reason regulators could not tolerate.
The second type involves pinning it down with existing licensing and derivatives regulations.
Europe is a hub for this approach. While the EU has the MiCA crypto-asset framework, it does not have clear rules for binary event contracts. Thus, member states tackle the issue individually, invoking their own national gaming and financial laws.
France's National Gaming Authority (ANJ) identified Polymarket as an unlicensed operator, prompting the platform to switch to a "view-only" mode for French IPs, where users can only view markets but not trade; Portugal's SRIJ issued a national ban in early 2026, arguing that betting on political events is inherently illegal; the Dutch Gaming Authority (KSA) issued an enforcement order in January, giving Polymarket four weeks to cease operations or face weekly fines of 420,000 euros, capped at 840,000 euros; Belgium, Poland, Switzerland, and Hungary have also placed it on their block or blacklists.
The UK presents a double obstacle. Without a UK gaming license, and with the Financial Conduct Authority (FCA) banning the sale of crypto derivatives to retail customers, Polymarket simply proactively geo-blocked all UK residents. After an investigation, the Australian Communications and Media Authority (ACMA) determined that prediction markets constitute unlicensed gaming, requiring ISPs to fully block access under the *Interactive Gambling Act 2001*.
The third type is a middle path: establishing a new framework to incorporate it into the system.
Brazil is the most typical "two sides of the same coin": it banned those decentralized, open-to-the-public, offshore platforms offering markets on sports and political events (i.e., Polymarket, Kalshi), but it didn't sweep the entire product category out the door. Instead, it authorized the domestic B3 exchange, through the securities regulator CVM, to launch regulated binary event derivatives. Initial underlying assets are limited to financial ones like the US dollar, the Ibovespa index, and Bitcoin, and are only open to professional investors with financial assets exceeding 10 million reals.
In other words, Brazil's goal is not to eliminate this type of product, but to reclaim it from offshore casinos, repackage it, and place it within its own securities system, selling it only to financial vehicles that can bear the risk.
Dubai follows another "setting thresholds" approach. It hasn't issued bans against anyone. Instead, through the Virtual Assets Regulatory Authority (VARA), it has established a clear licensing system. Any operator wanting to legally serve local residents must first obtain a VASP (Virtual Asset Service Provider) license and pass strict operational audits and anti-money laundering controls.
The common thread in these two approaches is that they do not treat prediction markets as mere gambling to be eradicated, but rather demand they shed their decentralized skin and assume a regulated identity before being allowed entry.
Does Polymarket Have a Strategy for Key Markets?
For key markets like the United States and Japan, it can be said that Polymarket's expansion is a pragmatic, tailored approach of negotiating country by country.
In the United States, Polymarket's path is buying its way back to legitimacy. In 2022, it was fined $1.4 million by the Commodity Futures Trading Commission (CFTC) and expelled from the US market. To return, it needed to acquire a license. In July 2025, it spent $112 million to acquire QCEX, a holding company for a derivatives exchange and clearing house holding a CFTC license, paving the way for a compliant return.
In November of the same year, the CFTC officially gave the green light, allowing it to operate as a regulated intermediary platform. However, the cost is that US users can no longer use anonymous decentralized wallets; they must go through the "Polymarket US" portal, pass strict KYC, and place orders through approved brokers. It can be said that the legitimate status Polymarket bought back came at the price of abandoning anonymity and decentralization.
Next is bringing capital into the system. In October 2025, the New York Stock Exchange (ICE) announced an investment of up to $2 billion in Polymarket, valuing the platform at around $9 billion post-investment. But what ICE is after is the event probability signals generated by crowd trading on the platform, and it will become the exclusive distributor of this data to global institutional investors. For Polymarket, this means selling its most valuable asset into Wall Street's data pipeline.
Back in Asia, in Japan, the pace is different. Polymarket has appointed a local representative in Japan and is preparing to lobby for the "legalization of prediction markets." Leading this effort is Mike Eidlin, currently the Japan lead for the Solana ecosystem DeFi project Jupiter.
Polymarket's interest in the Japanese market is evident in the data. As of June 2025, on-chain value in Japan grew by 120% year-on-year, making it the fastest-growing market in the entire Asia-Pacific region. Combined with Japan's deep-rooted speculative trading culture—from forex and horse racing to pachinko—it's a market that is both "wealthy and loves to trade."
However, gambling is a major legal minefield in the country. Japan's Penal Code stipulates that habitual gambling can be punished with up to three years imprisonment, and operating a gambling business can lead to up to five years. Only a few exceptions like government-authorized horse racing and public lotteries are permitted. Even the pachinko industry, worth about 16 trillion yen (approximately $100 billion), operates through a迂回 (roundabout) design where "exchanging prizes for cash must be done at a separate shop" to circumvent the gambling ban.
In such an environment, prediction markets currently have no clear legal category to fit into. This is why Polymarket has set its target for 2030. Particularly, Japan's regulatory process is known for its extreme prudence; reviews for any new product category involving DeFi infrastructure and crypto-collateralized markets often take years.
According to insiders, Polymarket plans to collaborate with Japanese institutions and companies over several years to gradually build a scalable framework. This is positioned as a long-term institutional project, not an opportunistic rush. During this waiting period for approval, it has chosen to lay the groundwork through community operations: Polymarket's Japanese X account has already amassed over 53,000 followers, maintaining a presence by sharing news.
An industry advocate describes Japan as entering a stage where "prediction data could become a valuable new layer in financial and media infrastructure," which is almost a Japanese version of ICE's business model.
Conclusion
Zooming out from Polymarket, one finds this tug-of-war of "easier to conquer than to govern" is playing out across the entire industry, and the stakes are getting higher.
Despite significant legal and compliance risks, the overall trading volume of prediction markets is experiencing explosive growth. A research report from Wall Street brokerage Bernstein points out that global prediction market trading volume reached $51 billion last year, is expected to climb to $240 billion in 2026, and has the potential to surpass the $1 trillion mark by 2030.
These platforms are evolving from niche betting parlors into vast information markets spanning finance, geopolitics, and the macroeconomy. But regardless of how large the scale becomes, the fundamental challenge Polymarket faces in every market is the same: how does a system born of decentralization and permissionlessness embed itself into regulatory frameworks premised on sovereignty, licensing, and consumer protection.
For prediction markets, the real hurdle has never been scaling up, but proving, in every regulatory battle and political negotiation, that they have the right to stay.
