Polymarket Cleared to Relaunch US Prediction Market

Polymarket, the world’s largest prediction market, is making its way back to the US after more than three years on the sidelines. The U.S. Commodity Futures Trading Commission (CFTC) gave the green light on Wednesday, as announced by chief executive Shayne Coplan, clearing its path for relaunch after fixing a series of past regulatory hurdles.

“Record-Timing” Return on the Market

Prediction markets, which allow users to buy and sell shares tied to the outcome of future events, have always sparked debate. Supporters argue they offer sharper insights than traditional polling, while critics dismiss them as nothing more than “digital casinos.” 

Polymarket has been at the center of this conversation, allowing users to wager on everything from election outcomes and government policies to sporting events and entertainment. Interest has spiked in the past year, especially around political contracts tied to the 2024 presidential race.

The comeback, which occurred in “record timing” and was credited to the “impressive work” of the Commission and staff, became possible after Polymarket completed a $112 million acquisition of QCEX, a CFTC-licensed derivatives exchange and clearinghouse. The purchase gave Polymarket the infrastructure it needed to meet U.S. compliance standards. 

Alongside the approval, the CFTC’s Division of Market Oversight and the Division of Clearing and Risk issued a no-action letter, which offered relief on some reporting and recordkeeping rules for event contracts.

Prediction Markets, “An Important New Frontier”

“The CFTC’s acting chair has previously referred to prediction markets as ‘an important new frontier’ and today’s decision certainly cements this sentiment,” said Nick Jones, founder of crypto firm Zumo. “Some on Wall Street now believe prediction markets could be bigger than the stock market one day.”

For Polymarket, the ruling represents a dramatic turnaround, as the platform originally exited the U.S. in 2021 after settling with regulators over charges that it had been operating an unregistered derivatives exchange. 

Since then, it has operated overseas, while rivals like Kalshi tested the waters at home. Kalshi itself scored a major legal win last year, securing permission to list contracts tied to political outcomes after challenging the CFTC in court.

Investor appetite for these markets is clearly growing. Kalshi was valued at $2 billion at the end of June, following a $185 million fundraising round. Polymarket has also attracted fresh backing, with its most recent investment coming from 1789 Capital, a pioneering investment company aimed at funding the next era of American exceptionalism, backed by Donald Trump Jr.

With regulatory approval in hand, Polymarket is now positioned to re-enter the American market at a pivotal moment, just as demand for political and event-based betting is booming.