Predictive betting platforms will enjoy some regulatory flexibility in the United States. A decision by the Commodity Futures Trading Commission (CFTC) clarifies the scope of their operations.
CFTC Takes a Lenient Approach to Predictive Betting Platforms
Predictive betting sites have been booming recently in the United States, and the CFTC plans to let them grow without monitoring them too closely. At least, that is what emerges from “no-action” letters sent to the companies concerned this week.
Specifically, the CFTC has indicated that prediction market platforms will not be required to comply with certain record-keeping obligations, provided they meet other requirements. The letters were sent to Polymarket, PredictIt, Gemini, and LedgerX/MIAX.
The conditions are that operators must ensure their contracts are always fully collateralized and must not pay out settlements from sources other than their platform. They must also publish data related to swap contracts immediately after their execution.
Once these conditions are met, the platforms are not required to comply with the data retention requirements for swaps that take place on the platform.
Supporting the launch of local platforms
While Polymarket had at one point withdrawn from the U.S. market, the trend is now moving in the opposite direction. Prediction betting platforms are booming, and new ones are launched every week. Yesterday, for example, we learned that Gemini would also be launching its own prediction market.
Notional volumes (across all assets) on prediction betting platforms are now approaching $4 billion, with an ever-growing number of users on Polymarket, Opinion, Kalshi, and others:
Recent volumes on prediction betting platforms
While the sector is booming in the United States, this is not the case everywhere. In Europe (and in France in particular), prediction betting platforms are viewed with suspicion, and the regulatory framework remains rather vague at this stage. Their true widespread adoption will therefore likely require new, more explicit regulatory frameworks.
