Law enforcement in Taiwan is currently investigating individuals promoting a Polymarket contract related to Taiwan’s upcoming election, according to reports from local media outlet BlockTempo. The contract allows users to bet on the outcome of the January election, with over $300,000 already bet on a contract regarding the election’s outcome. The market currently gives the Democratic Progressive Party’s Lai Ching-te, also known as William Lai, a 78% chance of winning.
However, betting on the outcome of an election is expressly prohibited under Article 88-1 of Taiwan’s Presidential and Vice Presidential Election and Recall Act. The law stipulates that individuals gambling on the outcome of an election shall face penalties, including fixed-term imprisonment, short-term detention, or fines. Law enforcement agencies in Taiwan are vigilant in investigating any gambling activities related to presidential elections, and broad legal interpretations have led to investigations and convictions of gambling website operators targeting Taiwanese gamblers.
Although gambling on election outcomes is illegal in most US states, including Nevada, enforcement is primarily carried out by the Commodity Futures Trading Commission (CFTC). Polymarket’s Terms of Use prohibit US persons from using the platform. KalshiEX, another prediction market, even sued the CFTC over its decision to ban its proposed derivatives contracts for betting on congressional control, arguing that these contracts are lawful and beneficial for public interest.
Enforcing actions against overseas entities present jurisdictional challenges for Taiwanese authorities, limiting their legal reach primarily to domestic actors. This raises complexities in dealing with platforms like Polymarket, especially due to its decentralized nature and lack of physical presence in Taiwan. However, law enforcement would likely target online influencers involved in promoting the contract. Recent cases have seen Taiwanese prosecutors pursuing online influencers who were promoting trading platforms.
An additional challenge for Taiwanese authorities is the lack of established legal precedent for decentralized platforms organizing election betting. While there is legal precedent to go after centralized entities organizing election gambling, the same cannot be said for decentralized platforms.
At the time of the report, Polymarket CEO Shayne Coplan did not provide a comment. As the investigation in Taiwan unfolds, it remains to be seen how authorities will address the legal implications surrounding online influencers and the decentralized nature of platforms like Polymarket.