Polymarket Readies US Return Amid Prediction Markets Challenges
According to Bloomberg reports, the prediction markets platform Polymarket is preparing to relaunch in the US, starting with sports betting. The comeback could happen before the end of November, but reports say that access will be limited at first.
The company's delayed return is a significant departure from its 2022 departure from the country and payment of a $1.4 million fine to resolve charges from the Commodity Futures Trading Commission (CFTC) for trading without registration. Since then, Polymarket has tried to win back investors' trust and was recently reported to be raising money at a value of between $12 billion and $15 billion.
Shares of the best sports betting sites dropped following reports of Polymarket's return, with DraftKings falling as much as 9.2% and FanDuel owner Flutter Entertainment down 4.7%. The market reaction was compounded by news that President Donald Trump's social media company would enter the sector through a partnership with Crypto.com.
Polymarket's comeback follows its acquisition of QCX, a company holding CFTC licenses for both a derivatives exchange and a clearinghouse. The purchase came after the Justice Department and CFTC ended their investigations into the platform earlier this year.
This development comes as the broader prediction market industry expands following competitor Kalshi's court victory, which enabled federally regulated trading on presidential election outcomes.
Polymarket said it has opened a waitlist for US users ahead of launch, encouraging signups while development continues. Federal regulators have not commented on the prediction market app's pending return.
Prediction markets are increasingly targeting sports betting in states where traditional sportsbooks remain restricted. Despite the controversy, large exchanges like CME Group have also expressed interest in the space, reportedly exploring sports-betting derivatives through a partnership with FanDuel.
Federal court sends Kalshi case back to Massachusetts state court
As Polymarket looks to make its US return, Kalshi suffered a setback in one of its many legal battles. A federal judge ruled that the Polymarket rival's ongoing legal battle with Massachusetts must proceed in state court.
The US District Court for the District of Massachusetts's decision to remand the case to Suffolk County Superior Court cannot be appealed, which seemingly gives the state more weight.
Massachusetts Attorney General Andrea Campbell originally sued Kalshi in September, alleging that its contracts constitute illegal gambling. Kalshi said that the federal Commodity Exchange Act provides the CFTC full control over its markets, overriding state laws.
The court rejected Kalshi's claim of "complete preemption," saying that federal law does not completely remove states' power to control gaming inside their own borders.
Judge Richard G. Stearns said that Kalshi's claim was a standard preemption defense, not a full one. This means that the matter is still under state authority. The decision is the latest blow to prediction markets, which have lost in Maryland and Nevada, as well.
