Tokyo Gaming Giant Gumi Targets Prediction Markets — Legal Minefield Ahead?

According to company statements, the platform targets millions of potential users in Asia’s crypto communities. Meanwhile, US-based Kalshi raised $300 million on October 10 at a $5 billion valuation, announcing expansion to over 140 countries, including China and India, despite potential legal hurdles in those markets.

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On Friday, Gumi stated its proposed platform would allow users to forecast events across politics, economics, entertainment, and social issues. The company plans joint verification experiments with media companies, data analytics firms, and research institutions, though it did not provide a specific launch timeline.

Asia’s Fragmented Regulatory Landscape

The expansion of prediction markets into Asia confronts vastly different legal frameworks across jurisdictions. In the Philippines, legal expert Marie Antonette Quiogue confirmed on October 26 that prediction markets remain illegal, with no short-term pathway for legalization under current PAGCOR licensing requirements. China maintains strict prohibitions on gambling activities, while India presents similar regulatory uncertainties despite Kalshi’s announced expansion plans.

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Japan’s legal environment presents particularly complex challenges. According to legal interpretations, current offshore prediction platforms that involve wagering cryptocurrency for potential payouts likely violate Japan’s criminal gambling statutes.

Gumi acknowledged this challenge, stating it aims to ensure “fairness, transparency, and legal compliance” in its service design.

The company has not disclosed how it plans to structure its platform to comply with these restrictions. Unlike jurisdictions where regulatory frameworks for crypto-based prediction platforms are developing, Japan’s existing statutes broadly prohibit betting activities with limited exceptions for government-sanctioned gambling.

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Entertainment Strategy as Compliance Approach

Gumi indicated it will incorporate gaming mechanics and entertainment features. It aims to “create a mechanism that a wider range of users can enjoy by integrating gaming and entertainment elements, while incorporating new use cases for cryptocurrency.”

This approach differs from existing platforms like Polymarket, which function primarily as trading venues for forecasting future events.

Industry observers suggest that emphasizing entertainment value over financial speculation could be an attempt to position the platform differently under Japanese law, though the viability of this strategy remains untested. Gumi’s background in mobile gaming may inform its approach, but analysts question whether gaming elements alone can address fundamental legal classification issues.

The company has not provided details on token economics, payout structures, or verification mechanisms that would demonstrate compliance with Japanese regulations. As prediction market platforms proliferate across Asia with varying regulatory approaches, the success of Gumi’s compliance strategy could influence how other regional players navigate similar legal constraints.