In January 2025, Thailand's Technology Crime Suppression Division sent a directive to Polymarket. The world's largest prediction market was classified as illegal online gambling under Thailand's 1935 Gambling Act. Thai users would be moved to "close-only" mode.
The story barely made international news. Inside Thailand, most crypto users still don't know it happened.
Here's the full picture: what actually got banned, what Thai users can still do, and why this regulatory situation is a case study in what emerging market regulators are getting wrong about prediction markets.
What "close-only" actually means
Polymarket didn't leave Thailand entirely. Instead, it moved to a middle-ground status: existing Thai users can log in, view their positions, and sell their existing YES/NO shares. What they cannot do is open new positions, deposit additional funds, or add cash to their accounts.
The technical mechanism is straightforward. Thai IP addresses see a modified interface. The order book is visible for their existing positions but the "Buy" side is grayed out. Withdrawals to compatible crypto wallets still function.
Thailand joins Singapore, Poland, and Taiwan in this close-only category. It's a middle ground between "fully banned" (like France, Germany, UK, Australia) and "fully open" (like Japan, Spain, Mexico).
The legal basis
Thailand's Gambling Act B.E. 2478 was passed in 1935. It predates the internet by 60 years, prediction markets by 90 years, and crypto by 80 years. Under this law, most forms of wagering on future events are illegal without specific authorization.
The TCSD's argument: Polymarket contracts are wagers on future outcomes, they involve real money changing hands based on the outcome of events outside the participant's control, and they're not licensed by any Thai regulatory authority. Therefore, illegal gambling.
Polymarket's counter-argument (implied by their operational response): the platform is a financial derivative exchange, not a gambling operator, and their US registration with the CFTC as a designated contract market should provide analogous legitimacy elsewhere.
The TCSD wasn't persuaded. Neither, notably, were the regulators in Singapore, Taiwan, and Poland.
Why Thailand ruled the way it did
Three factors likely shaped the decision.
The precedent problem. Thailand has been aggressive against online gambling generally. Football betting sites, online casino operators, and illegal lottery platforms all get blocked. Polymarket looked structurally similar enough to those platforms that a distinction would have been hard to draw.
The custody question. When Thai users trade on Polymarket, funds sit in USDC on Polygon — outside any Thai regulatory perimeter. The government has no visibility, no audit trail, no ability to intervene if something goes wrong. That's an uncomfortable posture for any financial regulator.
The tax gap. Polymarket profits earned by Thai users are technically taxable as personal income. But Thailand's tax administration has no automatic reporting mechanism from Polymarket. Estimated compliance was near zero. Blocking the platform closes the loophole.
What Thai users can actually do now
The options for Thai users interested in prediction markets have narrowed but not vanished.
Existing Polymarket positions can be closed. Any Thai user with pre-January 2025 positions can log in, sell to whoever is willing to buy at the current market price, withdraw USDC to a wallet, and off-ramp back to baht through a licensed Thai exchange like Bitkub or Orbix.
Manifold Markets still works. It uses play money, so it's not regulated as gambling. Thai users can practice forecasting at no financial risk.
Metaculus still works. It's a non-money forecasting platform with strong intellectual rigor. Great for building calibration skills.
Kalshi is inaccessible. Not because of Thai blocking, but because Kalshi requires US residency, an SSN, and a US bank account for signup.
VPN-based access exists but violates Polymarket's Terms of Service. Accounts accessed via VPN can be frozen. Funds locked. Not a serious solution.
The regulatory arbitrage that's happening
What Thailand banned in January 2025 was one specific platform. What Thai users actually want — access to prediction markets for financial and event forecasting — is not something the ban addresses.
The result: Thai crypto-native traders have simply migrated to workarounds. VPN access to Polymarket. Peer-to-peer bets on Telegram groups. Informal offline markets among trader communities in Bangkok. And, increasingly, waiting for a locally-compliant alternative to launch.
The regulator hasn't eliminated demand. It's just pushed demand into channels the regulator has less visibility on. This is the same pattern that plays out globally when regulators try to block financial innovation faster than they can license it.
What "locally compliant" actually looks like
A prediction market that could operate legally in Thailand would need to satisfy several criteria simultaneously.
Licensed as a securities or derivatives exchange, not classified as gambling. The distinction matters legally. Prediction contracts must be structured as event derivatives with financial hedging utility, not as bets on random outcomes.
Custodied through Thai-licensed intermediaries. Users' funds must sit with Thailand's SEC-approved exchanges or banks, not offshore in stateless USDC. That creates audit trails and consumer protection.
Denominated appropriately. Baht-denominated contracts are much easier to justify than USDC contracts. The Thai regulatory apparatus is built around baht flows.
Content-filtered. Certain question types (specific political outcomes, individual death markets, natural disaster casualty counts) would need to be excluded or restricted. Thailand's cultural and legal sensitivities are non-trivial.
KYC-enforced. Anonymous trading, a feature Polymarket users value, is unlikely to survive contact with Thai regulators. Full identity verification is the baseline expectation.
None of these are impossible. All of them are non-negotiable. This is the design challenge for anyone building a compliant prediction market for the Thai market.
The tax question everyone gets wrong
Even if a Thai user maintains a Polymarket position from before January 2025, or accesses the platform via a workaround, tax treatment is uncertain.
Thailand exempts capital gains from digital asset transactions conducted through SEC-licensed exchanges from personal income tax through December 31, 2029. Bitkub and Orbix qualify. Polymarket doesn't.
Gains from Polymarket positions would likely fall outside the exemption. That means standard progressive income tax rates of 5-35% apply. But there's no clean reporting mechanism. Thai users who profit from Polymarket in the current gray zone are technically obligated to declare, but the enforcement mechanism is weak.
This creates a two-tier problem: technical illegality of the platform, plus technical tax exposure of any resulting profits. Neither of which is well-communicated by anyone in Thai crypto media.
What actually comes next
Three paths forward for prediction markets in Thailand.
Path one: full block. If Polymarket users escalate their VPN usage significantly, or if a high-profile incident occurs (large loss, market manipulation, political embarrassment), Thailand could move from close-only to full ISP-level blocking. Australia went this route in August 2025. Thailand has the technical infrastructure ready.
Path two: regulatory framework. The Thai SEC could develop a specific licensing regime for event contract exchanges. Similar frameworks exist in the US (CFTC), UK (FCA), and Australia (ASIC). Thailand would need to distinguish "event derivatives" from "gambling" — legally possible but politically hard.
Path three: locally-built alternatives. A Thai-domiciled, SEC-licensed, baht-denominated prediction market that satisfies all the compliance criteria above. This is the path that scales.
What Juno is doing about it
Juno is built for path three. Thai-compliant infrastructure. Baht-denominated contracts. KYC-verified users. Licensed custodial arrangements. Question filtering that respects Thai legal and cultural boundaries.
This isn't a philosophical position — it's the only path that lets Thai users legally participate in prediction markets at scale. Polymarket won't get unbanned by Thailand any time soon. Kalshi won't accept Thai users. The gap needs to be filled locally, or it stays a gap.
The 90-year lesson
A 1935 gambling law is deciding the fate of 2026 financial innovation. That's the fundamental disconnect: Thai law was written for lottery scams and racetrack bookies, and it's being applied to global on-chain derivative markets by extension.
Some regulators will update their frameworks to distinguish these things. Some won't. Thailand's current posture is to apply the old law strictly. Thai users, meanwhile, want access to what the rest of the world is trading.
The gap between what the regulator has decided and what users actually need is the market opportunity. It's also the entire reason locally-compliant infrastructure has to exist. The Polymarket-Thailand story is a case study — and a warning about what happens when regulation moves slower than the technology it's trying to govern.