Polymarket predicts Taiwan's 2026 county and city elections with an "Kuomintang win rate of 88%"! Beware of trading violations of the Election and Recall Law

Market Prediction Polymarket recently launched the “2026 Taiwan Local Elections: Party Winners” trading pair. Currently, 88% of funds are betting that the Kuomintang will win the most seats in the county and city mayoral elections on November 28, while the Democratic Progressive Party (DPP) has only 12% support. However, the total trading volume of this market is less than $30,000.

(Background: Kalshi, a prediction market, cracks down on insider trading! MrBeast’s editor fined $20,000 and banned for two years; former California gubernatorial candidate receives a five-year ban)

(Additional context: The Netherlands bans Polymarket, deeming it illegal gambling. Prediction markets in Europe are facing setbacks.)

Table of Contents

Toggle

• $30,000 “public opinion” — just for reference?
• Settlement rules are based on seats, not votes
• Beware of legal issues when participating in prediction markets
• Derivative insider trading concerns

The 2024 U.S. presidential election made Polymarket highly popular, with a total trading volume of $3.68 billion and accurate result predictions, turning this decentralized prediction market into a mainstream media-favored alternative poll. Now, Taiwan’s election market has launched as scheduled.

$30,000 “public opinion” — just for reference?

According to Polymarket’s page, the current “2026 Taiwan Local Elections: Party Winners” market shows an 88% buy-in for the Kuomintang and 12% for the DPP. This seems overwhelming, but the total market trading volume is less than $30,000, with relatively few participants, possibly because the election is still far away.

By comparison, Polymarket’s trading volume during the 2024 U.S. presidential election reached $3.68 billion (about NT$114.8 billion), a difference of five orders of magnitude. Under such liquidity conditions, just a few trades can significantly change odds. The so-called “88% win rate” is more like a reflection of a few people’s betting preferences rather than a prediction formed by collective money.

Settlement rules are based on seats, not votes

The settlement logic of this market is also noteworthy. According to Polymarket’s rules, the final result will be determined by which party’s official nominated candidate wins the most seats across Taiwan’s 22 county and city mayoral elections, not by total votes.

Independent candidates’ seats are not counted toward any party. In case of a tie, the winner will be decided based on the alphabetical order of the party’s English name, meaning KMT (Kuomintang) naturally ranks before DPP (Democratic Progressive Party).

Beware of legal issues when participating in prediction markets

For Taiwanese users, the biggest risk of participating in such markets is not losing money but violating election and recall laws. Polymarket has explicitly stated it does not open to Taiwanese users, but the permissionless nature of blockchain means technically participation is still possible.

However! Article 88-1 of Taiwan’s Civil Service Election and Recall Act states that using the internet to bet on election results can result in up to six months’ imprisonment, along with a fine of NT$100,000 to NT$1,000,000. Providing a venue or gathering people for betting can lead to up to five years’ imprisonment. The Taiwan High Prosecutors Office has also made it clear that election betting pools are illegal. Past cases and prosecutorial standards classify prediction markets as “gambling.”

During Taiwan’s 2023 presidential election, police mobilized over 70 officers nationwide to raid and arrest 17 users suspected of participating in election betting via Polymarket. Law enforcement traced on-chain transactions back to centralized exchange addresses and used KYC data to identify real identities. The anonymity of blockchain is far more fragile in legal proceedings than many think.

Derivative insider trading concerns

The compliance issues of prediction markets are not unique to Taiwan. Recently, U.S.-based prediction market Kalshi revealed its first insider trading cases: MrBeast’s editor was fined $20,000 and banned for two years for using non-public information to bet, and a former California gubernatorial candidate was sentenced to a five-year ban.

U.S. Democratic Congress members have also proposed the “2026 Financial Prediction Market Public Integrity Act,” aiming to prohibit elected officials and insiders from participating in “political” prediction market transactions.