Polymarket Reenters the U.S. Market with Acquisition 

Prediction provider Polymarket has reentered the United States with its acquisition of a smaller company, QCEX, which operates as a Commodity Futures Trading Commission-licensed derivatives exchange, giving the company access under the CFTC to operate in all 50 states.

Welcome Home

Polymarket, along with competitor Kalshi, has been under scrutiny by federal and state authorities. This prompted Polymarket to suspend operations in the U.S. and provide services internationally. However, with the $112 million acquisition of QCEX, Polymarket can now operate in the States once again.

In 2022, the CFTC ordered Polymarket to pay $1.4 million and shutter operations in the U.S. for failure to comply with proper registration policies. Polymarket CEO Shayne Coplan has now purchased a company that is compliant with the CFTC guidelines and said he is “bringing Polymarket home” to where it all began.

Coplan said, “Polymarket is the largest prediction market globally and has become synonymous with understanding the probability of current events.”

“With the acquisition of QCEX, we are laying the foundation to bring Polymarket home—re-entering the US as a fully regulated and compliant platform that will allow Americans to trade their opinions,” concluded Coplan.

Sergei Dobrovolskii, founder of QCEX, took the opportunity to applaud the synergy of the two firms, saying, “Shayne has built a cultural phenomenon in Polymarket. I am excited to bring our companies together and leverage our licenses, technology, and expertise in the retail trading sector to help Polymarket reach its full potential.”

State Regulatory Agencies Pushing Back

Derivative futures trading platforms have been Wall Street mainstays with those who are interested in buying contracts for commodities like gold, silver, or any number of other items whose price can fluctuate. It is like betting on a sports team to win the game, and soon the platforms branched out into offering contracts on political races, mainly the U.S. presidential race between Donald Trump and Kamala Harris.

And it wasn’t long after the prediction markets proved prescient, predicting a landslide win for Trump while traditional polls projected Harris as the winner, that these platforms began offering contracts on the Super Bowl. This began the spat with the mobile sportsbooks that all must abide by state regulatory authorities and their rules and be licensed to operate.

The mobile sportsbooks pay millions in taxes, but the prediction markets are governed federally by the CFTC and can thereby operate in all 50 states with impunity. This has caused those state regulators to issue cease-and-desist orders while bringing legal action. The first few legal rounds have been won by the trading platforms, which has allowed them to continue to operate in the sports events market, but the legal battle is far from over.

Industry trade groups advocating for sportsbooks, like the Nevada Resort Association and the Casino Association of New Jersey, have both written to the CFTC to ask for their guidance. However, the CFTC has been reluctant to interject itself in the dispute.

In April, Nevada Resort Association president and CEO Virginia Valentine wrote to the DFTC, stating, “Nevada stands as the nation’s home for legal gaming, and we have spent decades offering safe, legal sports betting to Americans. Allowing for sports wagering to happen outside of state-regulated channels puts citizens at risk and endangers the critical economic support gaming provides.”

Thus far, the CFTC has failed to act, but the matter is far from concluded.