A study conducted by the Coalition for Prediction Markets (CPM) has unveiled that illegal offshore prediction markets have facilitated trades worth up to $34 billion for US users. These yes/no exchanges, unlicensed and operating outside US regulatory frameworks, have raised eyebrows within the industry. The research, which involves collaboration with Rutgers University professor Harry Crane, places a notable emphasis on platforms like Polymarket as major players in this large trading volume.
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Potential Growth Raises Regulatory Concerns
Sean Patrick Maloney, CPM President, suggests that the offshore prediction market sector’s potential growth could see it reaching a value of $133 billion by 2030. That’s no small feat—it could even eclipse some of the country’s major entertainment industries. Maloney points out that the central issue isn’t the existence of these markets but whether they should be subjected to US regulation or left in their current offshore haven, notorious for hosting controversial bets. Given the rapid expansion of the sector, it’s no surprise that the Commodity Futures Trading Commission (CFTC) has started crafting new regulations aimed at tightening control over these platforms. However, the study doesn’t dig into why traders are flocking to these unregulated markets. Possibilities include the appeal of decentralized platforms like Polymarket, reduced trading costs, and broader trading options.
Regulated Markets Catching Up
Despite the dominance of offshore markets, regulated prediction markets in the US are expanding at a faster pace, growing 4.8 times faster than their unregulated peers between 2024 and 2025. This surge is noteworthy given that offshore activities still account for more than half of the total turnover, though this is a decline from previous years. It’s indicative of a growing preference among traders for platforms that operate under legal oversight. In 2025, US-regulated sportsbooks saw a total handle of $168 billion, yet some speculate offshore betting volumes could range between $300 billion and $330 billion. This gap highlights the ongoing challenge for the industry to compete with the allure of unregulated markets.
Kalshi Leads Among Regulated Platforms
Kalshi stands out as the dominant player among US-regulated yes/no exchanges. The company recently stirred conversation by announcing a partnership with Sportradar, which is known for its real-time sports data services to various stakeholders in the betting ecosystem. This deal has sparked debates around the implications for regulated prediction markets and their competitive stance against offshore entities. Still, the CPM study projects continued growth for regulated platforms, but the uncertainty of offshore prediction markets’ evolution remains. A key question is whether increased regulation will successfully draw traders away from these unlicensed operations. Anticipating regulatory action, the CFTC’s new rules could reshape the market for both regulated and offshore prediction markets. The board is expected to review and possibly introduce these regulations in the coming quarters.
David Harrison stands tall in gambling journalism, marrying his firsthand casino experiences with a deep understanding of betting psychology. His articles transform complex gambling jargon into engaging tales of strategy and chance, making the world of betting accessible and enjoyable. David’s knack for narrative extends beyond print, making him a sought-after speaker on gambling trends and future bets. In the realm of gambling, David is both a scholar and a storyteller, captivating readers and listeners alike.
