Polycentric Gambling Control: How Ukraine Positions Polymarket and Web3 Markets

The development of Web3 predictive platforms has encountered an unexpected obstacle in Ukraine — a multi-layered ban that reflects a deeper issue in the interaction between the history of gambling and modern digital regulation. The prohibition of Polymarket and approximately 200 related websites indicates not just a separate political decision but a systemic lack of legal grounds for recognizing and regulating these platforms.

Lack of Legal Framework: Understanding the History of Gambling Through Modern Law

The state has classified Polymarket and similar platforms as unlicensed gambling operators, but this classification has proven problematic due to its inconsistency with current realities. As Dmitro Mykolaivskyi, Chief Legal Advisor of the Ukraine Digital Economy Development Office under the Ministry of Digital Transformation, explained, Ukrainian legislation does not even include the concept of a “prediction market.”

This means that any platforms using cryptocurrency to organize bets on event outcomes are automatically classified under the traditional category of gambling — despite the fundamental differences in structure and technology. The history of gambling shows how legislation has always lagged behind innovation, but the gap in this case is so significant that it leaves no legal way for the operation of decentralized prediction markets.

Why Polymarket Became the Focus: Context of War and Fair Regulation

The NKRZI issued a directive to block following the recommendation of PlayCity — the state gambling regulator, which emphasized the lack of a license for the platform and, more importantly, the presence of bets related to the Russian-Ukrainian conflict. According to local publication AIN, bets totaling over $270 million had been placed on Polymarket regarding military event outcomes.

Mykolaivskyi suggested that this aspect might have accelerated the blocking process. “Bets related to the war,” although legally a basis for action, could have attracted regulators precisely because of their sensitivity to society. This highlights a complex regulatory delay: 30 countries have already restricted the platform, and Portugal recently joined this list, but each country was guided by different grounds.

From Blocking to Legal Recognition: Is Transformation Possible?

On the horizon, legislative changes are shadowed by uncertainty. Any amendments to the definition and regulation of gambling must be approved by the Verkhovna Rada of Ukraine, and according to an official representative, “the likelihood of their review is extremely low,” especially amid wartime.

However, there is one important nuance: the ban targets platforms, not users. Currently, there are no legislative mechanisms to hold accountable individuals who use VPNs or directly interact with decentralized smart contracts. Mykolaivskyi is unaware of any attempts by the state to prohibit citizens from interacting with decentralized protocols, leaving room for circumvention.

This creates a paradoxical situation: while other prediction markets — Kalshi and PredictIt — remain off the official blocked sites list, a citizen’s report to PlayCity could potentially change their status, as the regulator allows submitting official complaints against suspected platforms. Thus, the story of gambling in Ukraine continues into a new chapter — a chapter of uncertainty and unstable equilibrium between restrictions and the realities of the digital world.