After nearly four years of being barred by U.S. regulators, the return of prediction market platform Polymarket marks a pivotal moment for this emerging industry. Backed by a $2 billion investment commitment from Intercontinental Exchange (ICE), the operator of the New York Stock Exchange, Polymarket is re-entering the world's largest economy with plans to first target sports events before expanding into a vast arena where "anything" can be traded. This move is set to intensify competition with traditional sports betting giants and drive the expansion of the entire prediction market sector.
According to the company's announcement on Wednesday, Polymarket has officially relaunched in the U.S. after its nearly four-year ban. The platform had been prohibited from operating in the U.S. since January 2022, when it reached a settlement with the Commodity Futures Trading Commission (CFTC). Now, its app is being rolled out to a waitlist of over 200,000 users.
The comeback coincides with unprecedented interest in prediction markets in the U.S. Polymarket's app topped Apple's free sports app download charts even before its official launch. Its "sports-first, everything-next" strategy will directly challenge competitors like Kalshi and potentially disrupt the businesses of traditional sports betting firms such as DraftKings and Flutter. These established players, sensing the pressure, are already planning to launch their own prediction market products.
Polymarket's return is not an isolated event but part of a capital-flush, increasingly competitive market landscape. Two months ago, the company secured a $2 billion investment commitment from ICE, which will also distribute Polymarket's event-driven data to provide clients with sentiment indicators on market-related themes.
From Sports to Macroeconomics: Betting on Everything Polymarket's expansion path is clear: start with sports, then broaden to "markets about everything." The platform will initially offer sports event contracts before adding markets on diverse topics. Its international users can already trade on questions like whether U.S. Defense Secretary Pete Hegseth will leave office by March 31 next year or the closing price of gold in 2025.
In contrast, rival Kalshi's $5.8 billion monthly trading volume in November was largely driven by sports-related contracts, while Polymarket's $3.7 billion monthly volume stems more from its expertise in macroeconomic and political markets.
However, this expansion is not without hurdles. Due to their resemblance to sports betting, sports event contracts remain controversial in the U.S., where regulation falls under state jurisdiction. Kalshi, Polymarket's main competitor, has already faced multiple legal battles over this issue. Whether Polymarket will encounter similar challenges remains to be seen, as reported by Front Office Sports. Nonetheless, prediction markets are rapidly expanding their reach from sports and politics to macroeconomics, with Kalshi CEO Tarek Mansour describing the industry as "replacing debate, subjectivity, and rhetoric with markets, accuracy, and truth."
Big Bets: Capital Floods into Prediction Markets Prediction markets are becoming a new hotspot for capital, attracting massive investments from mainstream financial institutions. Polymarket isn't the only platform receiving hefty funding. Kalshi announced a $1 billion financing round on Tuesday, valuing the company at $11 billion—its third funding round this year, more than doubling its valuation in just months.
This trend is also visible in public markets. Online broker Robinhood's stock has surged over threefold this year since partnering with Kalshi in March to launch a prediction market hub. The company further deepened its foothold in the sector by acquiring a 90% stake in MIAX Derivatives Exchange last month. The influx of capital and endorsements from mainstream institutions are transforming prediction markets from niche financial "bets" into widely accepted trading tools spanning sports, entertainment, and finance.
Traditional Sports Betting Firms Face Disruption As Polymarket returns, the U.S. prediction market landscape has grown crowded, with new entrants like PrizePicks, Underdog, Novig, and even Trump's Truth Social platform. Yet the biggest shockwaves are being felt in the traditional sports betting industry.
DraftKings and Flutter Entertainment (owner of FanDuel) are reportedly uneasy and have announced plans to launch their own prediction market products. While executives claim sports betting and prediction markets are distinct and won’t cannibalize each other's users, new products like "same-game parlays" are already encroaching on their core businesses.
When Polymarket and Kalshi signed deals with the NHL—making it the first major U.S. sports league to license trademarks to prediction markets—DraftKings and Flutter's stocks reacted negatively. Recent earnings reports also show softening sports betting revenues for both companies.
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