Polymarket, a blockchain-based prediction market platform, is reportedly planning to relaunch in the United States by late November, with a focus on sports betting. This move marks a significant comeback for the company, which paid a $1.4 million fine to the Commodity Futures Trading Commission (CFTC) in 2022 and subsequently moved its operations outside of U.S. jurisdiction.
The initial relaunch will involve limited trading access for U.S. residents, strategically timed to capitalize on the peak of the U.S. football (NFL) and basketball (NBA) seasons.
Polymarket's return to the U.S. market is made possible by its acquisition of QCX, a CFTC-regulated derivatives exchange and clearinghouse, for $112 million. This acquisition grants Polymarket a Designated Contract Market license, enabling it to self-certify markets for U.S. users and operate prediction markets in full compliance with federal commodity futures regulations. The viability of Polymarket's return was solidified earlier this year after the Department of Justice and the CFTC dropped additional investigations into the crypto-betting platform.
Despite securing the necessary regulatory framework at the federal level, Polymarket may still face scrutiny from state-level gaming regulators, particularly in states without legalized sports betting, such as California, Texas, and Florida.
The prediction market industry has seen substantial growth since Kalshi Inc., a direct competitor, won a key court case against U.S. regulators last year. This victory allowed Kalshi to offer "event contracts," such as those based on the outcomes of presidential elections, setting a precedent in the market.
Driven by this industry boom, Polymarket is reportedly seeking to raise funds at a valuation between $12 billion and $15 billion. The company's prominent investors include Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, and Coinbase Ventures. Earlier venture capital investors include Polychain Capital and General Catalyst.
The relaunch of Polymarket in the U.S. comes at a time when other companies are also exploring prediction markets. Trump Media and Technology Group, co-founded by former U.S. President Donald Trump, recently announced plans to enable prediction markets through its social media platform, Truth Social, in partnership with cryptocurrency exchange Crypto.com.
