Polymarket secures US return with license approval

Source Cryptopolitan

Polymarket, a prediction company, steps back into the US after being forced to block American customers under the order of the enforcement agency, the Commodity Futures Trading Commission (CFTC), in 2022.

Prediction market operator Polymarket is preparing to relaunch its platform in the United States after nearly four years of restrictions, with regulatory filings showing that trading could begin as early as Thursday.

The world’s largest prediction market announced its plans to reenter the American market after acquiring QCX LLC, later renamed Polymarket US, for $112 million. The acquisition gave Polymarket a Designated Contract Market (DCM) license in July. It can now self-certify markets for US users, including sports and political events.

Polymarket could launch 5 days early

According to the initial regulatory filings seen by Cryptopolitan, October 7 was slated as the prediction market’s earliest possible launch date. Revised filings submitted Wednesday with the CFTC have reportedly brought the date forward to October 2.

Polymarket DCM license filing. Source: CFTC

Visitors to the company’s website are being invited to join a waiting list ahead of the launch. A message on the homepage states that Americans will be notified by text message when the platform is ready for registration.

“Polymarket will soon be available for US traders. We’re working hard to get the US platform ready for launch,” the message reads.

Polymarket’s return required months of negotiation with US regulators, even after it purchased QCX. The firm awaited a no-action letter from the CFTC that would prevent enforcement over alleged violations of swap data reporting and recordkeeping rules.

That letter arrived during the first week of September, when Chief Executive Shayne Coplan said it was a “green light to go live in the USA,” Cryptopolitan reported.

The company had ceased business in the United States in January 2022 after agreeing to block local users and paying a $1.4 million civil penalty for operating as an unregistered exchange and offering bets on illegal events. The settlement kept the platform running overseas but effectively banned Americans from trading on it.

Market rivalry with competitor Kalshi

Polymarket returns to a competitive environment where federally regulated Kalshi is on the highest ranks in the US prediction market space. According to data from Polymarket Analytics, a service not affiliated with the platform, Polymarket has recorded $877 million in trading volume, compared with Kalshi’s $291 million.

Back towards the end of August, the betting company announced Donald Trump Jr. had joined the company as an adviser ahead of its planned US relaunch. 

As reported by Politico, the eldest son of President Donald Trump sits on Polymarket’s advisory board, while his venture capital firm, 1789 Capital, takes a stake in the company; however, the size of the investment was not disclosed. Trump Jr. is a partner at 1789 Capital, which was founded by financier Omeed Malik.

Prediction markets wager on US politics

Polymarket’s US relaunch comes against the backdrop of a federal government shutdown this week after lawmakers failed to reach a budget agreement. Traders are speculating on how long the shutdown might last. 

On Kalshi, contracts imply that the government will be closed for about 11 days. However, Polymarket traders are more bearish, with the highest volume contracts betting on a 35% probability the shutdown will extend beyond October 15. 

8% of participants expect lawmakers to reach a deal this week between October 3 and October 5. Contracts predicting a resolution between October 6 and October 9 are trading at 28% odds, while October 10 to 14 is close at 29%. 

The impasse is from a dispute between Republicans, who control both chambers of Congress, and liberal senators, whose support is still required to pass spending legislation. 

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Disclaimer: For information purposes only. Past performance is not indicative of future results.
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