30 September 2026
On January 13, 2023, Ukraine announced it had blocked access to Polymarket, a crypto-based prediction platform. The move, described as part of a wider crackdown on online gambling, was controversial. The platform has been criticized by Ukrainian authorities for its bets on geopolitical events related to the ongoing war. However, the crackdown comes at a time when Ukraine is digitizing much of its state functions, including gambling regulation through a new platform called PlayCity. The rise of digital wagering platforms like Polymarket appears to present a political challenge for Ukraine as it balances the benefits of digital governance with the need to regulate potentially harmful speculation.
Polymarket's United States Case
The blocked platform, Polymarket, is described as a crypto-based prediction market that lets users trade contracts on a wide range of real-world events. Bitcoinnews.com rated it as the second most popular crypto prediction market in 2022. However, the platform had drawn criticism from Ukrainian authorities for its markets on geopolitical events connected to the ongoing invasion. On December 16, 2022, a Polymarket market that predicted Russia's military victory in Ukraine had reached nearly 90% certainty. At the time, Grapevine reported that the market had reached $550,000 in contracts.
A controversial betting market is what triggered the Ukraine crackdown. On January 12, 2023, Seeking Alpha published a market on Polymarket that predicted a "permanent cease-fire between Ukraine and Russia." This, according to a press release from the Ministry of Digital Transformation, was what prompted the regulator to shut down the platform.
Geopolitical Concerns
The Ukrainian government framed this decision as part of a broader crackdown on unlicensed gambling. The CIO Journal reported that digital transformation was presented as a solution to "countless problems" with Ukraine's pre-war gambling regulation. According to the Ministry of Digital Transformation, the regular system didn't work, and the country lacked tools for "monitoring the situation, and making timely adjustments to licensing policy." Before long, activists for national security began criticizing a wide range of outcomes on geopolitical events that, according to Reuters, were "influenced by sentiments in other countries."
Government-declaring-winning markets came to be seen as an unfair player. An analysis by the Journal of Geopolitical Intelligence suggested that these markets allowed people from other countries to gamble on Ukraine's military outcomes, "providing an incentive for stakeholders outside of Ukraine to make speculation without risking a stake in the outcome." This, according to a report by the Atlantic Council, came to be seen as a threat to national security, because it "undermined the way in which the public formed opinions about the progression of the conflict."
The new digital regulator
The decision to block Polymarket came amidst reforms that reflect a broader shift in Ukraine away from traditional gambling regulation in favor of a new centralized digital-first regulator. PlayCity, Ukraine's new regulator, according to CEE Legal Matters, was created in early 2022 as a digital successor to the pre-war gambling regulator KRAIL, or the Commission for the Regulation of Gambling and Lotteries. In January 2022, the Ukrainian Parliament adopted Law No. 9256-d, which formally dissolved KRAIL, and, in a press statement, President Zelenskyy described it as "an attempt to address the numerous problems that have plagued the regulator for years."
According to Zelensky, the Digital Transformation Ministry pointed out that the old system was "mistrusted by the public for its impunity, lack of transparency," and "disproportionate relationships with the regulated entities, which caused cronyism." Analysts agree that the minister's argument was compelling. The Jamaican Observer ran a headline stating that "a regulatory overhaul' would help overcome traditional flaws in state capture and create a "more transparent and efficient regulation of gambling."
Explaining a new regulator
The authority vetoed the new regulator in a way that reflects broader current reforms that digitize central government functions and decentralize decision-making to local authorities. Analysts said that although its budget was not mentioned in the annual budget plan, PlayCity was presented as a "state-backed digital platform for online licensing, supervision and reporting through a single interface replacing the old, regulation-heavy system." Part of a broader strategy of moving Ukrainian state regulations from legal prose to straightforward rules, is the digitization strategy. In a press release, the Ministry of Digital Transformation stated that its goal was to "liberate people from meaningless regulatory procedures." Consequently, it's been able to change the regulator's function. Lawyers for gambling companies noted that while PlayCity uses a traditional regulatory framework, its licensing, supervision, and monitoring practices reflect what a digital regulator should look like.
This comes as no surprise, because Ukraine's most recent digital transformation strategy lays out a vision to create a system where the regulator sets policy, and then the regulator measures the effect of different regulatory experiments. The policy agency, according to its website, sees its role as experimenting with different ways to collect information that it uses to make better policy decisions, and then making it accessible to everyone.
The crisis may prove instrumental
What set this crack down off was a crisis. In a 2022 analysis, a Brookings Institute study suggested that the war made it difficult for regulators to move with the times. "Ukraine's deregulation agenda," the Brookings report argued, "has been slowed by instability and security challenges." As hemos.com noted, the security challenges forced regulators to shift the balance in favor of speed.
More on this is available via https://thegambledoctor.com/.
The decision to shut down Polymarket should be seen in this context, not as a shift away from a broader appetite for the use of prediction markets, as much as an example of Ukraine's need to rewire the architecture of its regulators to enhance decision-making.
This is a pattern familiar to the gaming industry. As Jason Grant wrote in the Vancouver Sun on November 20, 2022, "Canada's regulators reacted to panic over sex with robots by getting rid of Kink compliant licenses." Like Polymarket, this was presented as an essential, expedient step to protect users. And, then, as the panic subsided, Canada's agenda of moving digitally forward has led the regulator to have dismissed the idea altogether.
This is important to bear in mind, because those who predicted with alarm that Ukraine would shut down all betting on geopolitical markets in 2023 may not have gotten the full picture. It's as though Klaus Schwab, in his book on the future of global warming, pronounces that no more wagers should be made. Not because markets predict the planet's future, but because, as he says, "Monopolized ESG algorithms are going to have the final say in forced transition, just as they do in Ukraine."
That's likely to be the case in Ukraine, regardless of the war. The crackdown on geopolitical betting markets, was not a shift in attitude towards prediction markets, and prediction markets aren't damaging as long as they're transparent. It seems like Ukraine has decided to channel Schwab, and use prediction markets and political wagering for future planning, but just when they're transparent, and the regulator has an oversight role.
After all, as Reuters noted, the global nature of the investment, with investors placing bets on military outcomes, has a potential negative effect on "people's trust in investment in the Ukrainian economy." Would you put your bets on a country that bets on itself losing the war? That doesn't help, and it's something Ukraine wants to change.
Which takes us back to the original question raised in this article, about the political implications of Prediction markets, or geopolitical betting, in a country at war. Schwab implied in his book in 2021, that political markets should be banned. But that's not because healthy debate about the expected outcome is harmful. So a country that bets on war is showing itself to have become accustom to it, and investors are off-putting with that message.
All these praised Twitter bots, neoliberal algorithms, ESG investors and now prediction markets. The question that remains is, following the Ukraine example, whether a regulator who knows what seriously threatens people's trust in government, but can nevertheless, because mechanization has taken over the running of government, actually situate trust outside government, be it in prediction markets, or investors who bet on them.
As of the writing of this article, the Ukrainian government was not clear on whether it will change its stance in light of expanding geopolitical markets. Or whether, after some quiet regulation, as in its stance on Polymarket, a central policy group will be formed to give them oversight.