The blockchain-based prediction market that gained significant traction during 2024 election coverage is now re-establishing its presence in the U.S. following federal approval. Initially focusing on sports wagering, the platform plans to expand into broader event contracts.
Polymarket's iOS application commenced a phased rollout on Wednesday, accessible through a waitlist system, with Android support anticipated soon. This launch signifies the platform's return to U.S. operations after a hiatus since 2022. At that time, the Commodity Futures Trading Commission (CFTC) ordered its closure, citing the operation of an unregistered derivatives exchange, and imposed a $1.4 million penalty.
Shayne Coplan, the founder, dedicated the past three years to restructuring the business to comply with regulatory mandates. In a significant move this summer, the company acquired QCX, a licensed derivatives exchange and clearinghouse, for $112 million. Subsequently, on November 25, Polymarket secured official CFTC clearance to operate as an intermediated exchange under federal commodities regulations.
The platform is actively differentiating itself from conventional sportsbooks. It presents its offerings as trading venues for real-world event outcomes, rather than purely gambling products. Currently, users can place bets with real money on sports results. The company has outlined plans to swiftly introduce proposition markets and eventually reinstate election contracts.
Market Competition and Partnerships
Polymarket faces formidable competition from Kalshi, a platform that recently concluded a funding round valuing it at $1 billion, with a total valuation of $11 billion. Both Polymarket and Kalshi have been aggressively pursuing distribution partnerships with sports leagues and established mainstream platforms.
Polymarket has forged a partnership with the fantasy sports app PrizePicks and has been designated as a clearinghouse for DraftKings' proposed prediction platform. In contrast, Kalshi has secured agreements with CNN and integrated with Robinhood. Analysis from Bernstein indicates that Kalshi's activity on Robinhood has, at times, accounted for more than half of the brokerage's total trading volume.
Both platforms experienced substantial growth in the latter half of the current year, although Kalshi has recently surpassed Polymarket in monthly trading volume. October was recorded as the most significant month for event betting on record, with Kalshi facilitating $5.81 billion in transactions, compared to Polymarket's $3.7 billion.
Legal Challenges and Future Ambitions
The focus on sports betting introduces legal complexities. Kalshi is presently engaged in legal disputes with state gaming regulators in Nevada and New Jersey concerning its offerings. A federal judge recently ruled that Nevada gaming laws are applicable to Kalshi's operations.
Polymarket is aiming for a valuation of up to $15 billion, following the procurement of $2 billion in strategic investment from Intercontinental Exchange, the parent company of the New York Stock Exchange. This investment was made at a valuation of $9 billion. In August, the startup appointed Donald Trump Jr. as an advisor, signaling its intent to leverage the evolving regulatory landscape and attitudes toward prediction markets under a new administration.