We knew Polymarket intended to officially re-launch prediction markets and event contracts trading in the U.S. Now, the company says it has the regulatory green light to offer “legal sports betting” in all 50 states.
The Commodity Futures Trading Commission (CFTC) announced on Wednesday that its staff has taken a “no-action position” on Polymarket-owned designated contract market (DCM) QCX LLC and designated clearing organization (DCO) QC Clearing LLC, collectively termed QCEX, regarding swap data reporting and recordkeeping regulations for event contracts.
“The divisions will not recommend the CFTC initiate an enforcement action against either entity or their participants for failure to comply with certain swap-related recordkeeping requirements and for failure to report to swap data repositories data associated with binary option transactions and variable payout contract transactions executed on or subject to the rules of QCX LLC and cleared through QC Clearing LLC, subject to the terms of the no-action letter,” wrote the CFTC in a Sept. 3 statement.
QCEX had requested the no-action verdict. The full Sept. 2 letter of response from the CFTC stressed that the no-action position is the decision of the CFTC’s Division of Market Oversight and the Division of Clearing and Risk only, and that final CFTC approval is still needed.
“This letter does not state any legal conclusion regarding the characteristics or legality of QCEX Contracts or the conduct of any person covered by the no-action position,” wrote the CFTC. “This letter and the no-action position taken herein are not binding on the Commission.”
How the regulatory winds change
Still, Polymarket CEO Shayne Coplan lauded the update on X, writing that it equates to approval for Polymarket to offer prediction market trading across the U.S. under the CFTC’s oversight.
Coplan added the process had been “accomplished in record time.”
And the Polymarket Sports X account, which claims its bio to offer “the most accurate sports odds and forecasts in the world,” also posted to hail the development.
“Legal sports betting on the world’s largest prediction market is coming to all 50 states,” read the post.
The party line is that Polymarket has not accepted trading from U.S.-based consumers since January 2022, when it struck a settlement with the CFTC as a result of allegedly failing to register with the regulator. The CFTC and the Department of Justice subsequently launched separate investigations into the cryptocurrency-focused exchange on suspicion of continued American operations but those probes, launched by the Joe Biden administration, were shut down by President Donald Trump’s administration in July.
Shortly afterward, Polymarket acquired the holding company of QCEX and QC Clearing (shorthanded as QCEX) in July for $112 million. Purchasing a pre-existing licensed DCM and DCO gave Polymarket a clear route back to U.S. operations, and the company said at the time that the acquisition “paves the way for U.S. users to access Polymarket in the near future within a fully regulated, U.S.-compliant framework.”
Coming 2 America
Since then, it has ramped up preparations for life as a CFTC-regulated prediction market, launching a new social media advertising campaign, offering people the chance to sign up for information on the U.S. launch and filing documentation with the CFTC.
Talk has suggested that it could launch as soon as this week, as a new NFL season begins. Its revised rulebook, submitted to the CFTC in August, takes effect on Sept. 5.
Polymarket has also hit headlines recently with multiple major U.S.-facing deals.
It is now the official prediction market partner of X, and the two firms intend to deliver an integrated product using Polymarket’s markets and real-time data and insights from X and its AI-powered assistant Grok. And in late August, Polymarket installed Donald Trump Jr. as a member of its advisory board after investment from his venture capital fund 1789 Capital. Trump Jr. is also a strategic advisor at Kalshi.
Yet more sports contract competition
Other prediction market operators have been expanding their sports offerings apace in recent times, with Kalshi recently expanding to first prop-style and now parlay-style markets in time for the NFL season.
Now, a major prediction markets player is about to step back into the ever-changing game.
