A new report from Asian Web3 research firm Tiger Research warns that Asia is rapidly losing its early lead in the global prediction market sector to Western competitors, largely due to a lack of proactive regulatory engagement. While the industry matures into a mainstream financial tool with approximately $14 billion in monthly trading volume, many Asian governments have yet to begin substantive discussions on how to regulate the space.
This regulatory vacuum is driving capital, talent, and innovation westward. The report highlights that Western jurisdictions—particularly the United States and parts of Europe—are actively working to bring prediction markets into their regulatory frameworks, while Asia continues to rely on outright bans or outdated gambling laws. The result, Tiger Research argues, is a loss of information sovereignty, as the high-quality probabilistic data generated by these markets flows to the jurisdictions that oversee them.
The core mechanism is simple: contracts priced between $0 and $1 reflect the market’s collective probability of an event occurring. Because participants have skin in the game, the information produced has proven remarkably accurate across elections, product launches, and economic indicators. Big Tech has taken note—Meta’s announced “Arena” project signals that prediction market mechanics are moving beyond niche crypto circles into corporate interest.
In Asia, however, the approach is starkly different. Singapore blocked Polymarket as an unlicensed gambling site in early 2025; Taiwan restricted it during the 2024 presidential elections; Thailand deemed it illegal and ordered ISPs to censor it. China maintains its total ban on gambling and crypto platforms. Polymarket now restricts access in Iran, Iraq, Lebanon, Myanmar, North Korea, Singapore, Syria, Taiwan, Thailand, and Yemen. India prohibited real-money online gaming in 2025, the Philippines canceled offshore gambling licenses, Hong Kong warned that prediction markets could be treated as illegal gambling, Indonesia froze over 33,000 gambling-linked accounts, and Vietnam banned illegal gambling apps. South Korea’s Opinion exchange hit 2 trillion won in weekly volume despite stringent gambling rules, underscoring that bans do little to suppress demand—they simply push it elsewhere.
In contrast, the West has chosen to regulate and is reaping the rewards. Data from blockchain intelligence firm TRM Labs shows that monthly transaction volumes in prediction markets surged from $1.2 billion at the start of 2025 to over $20 billion in January 2026, with roughly 840,000 active wallets. Platforms like Polymarket and Kalshi—a designated contract market under the Commodity Futures Trading Commission—have led the expansion. Kalshi’s regulatory status allowed partners such as CNN and Robinhood to integrate event contracts into mainstream offerings.
Yet the Western model is not without critics. Former SEC Commissioner Joseph Grundfest cautioned that highly specific event contracts could enable insider trading and that Polymarket lacks the AML/KYC controls required of traditional financial markets. Others liken prediction markets to “sports gambling wrapped in finance” and warn of regulatory uncertainty. The legal debate may eventually reach the Supreme Court over whether federal commodities laws preempt state gambling regulations.
Tiger Research concludes that Asian regulators now face a critical choice: develop frameworks that harness the sector’s benefits while protecting consumers, or continue losing ground as Western markets solidify their dominance in this fast-growing industry.
