TL;DR
- Polymarket plans an initial launch in the U.S. before the end of November, focusing on sports betting.
- The return occurs after acquiring QCX, a firm with CFTC licenses, and overcoming a $1.4M fine from 2022.
- The company is seeking a valuation of up to $15 billion in a booming prediction market.
Polymarket is preparing for a strategic relaunch in the United States in the coming weeks. This time, with a clear focus on the lucrative sports betting sector. According to people familiar with the confidential plans, initial trading is expected to begin by the end of November.
Although the launch will not be immediately massive, its timing is strategic, seeking to capitalize on the volume of the peak U.S. football (NFL) and basketball (NBA) seasons.
This move marks a surprising turnaround for the company. The news that Polymarket is returning to the U.S. comes after the platform was forced to operate outside of U.S. jurisdiction and paid a considerable $1.4 million fine in 2022.
This penalty was imposed by the Commodity Futures Trading Commission (CFTC) to settle allegations of illegal trading. The return, therefore, represents a complete restructuring of its regulatory and operational strategy.
The Regulatory Pivot and the Acquisition of QCX
The viability of Polymarket’s return was solidified earlier this year, after both the Department of Justice and the CFTC itself dropped additional investigations into the crypto-betting platform. The decisive step was Polymarket’s acquisition of QCX, a firm that already held key CFTC licenses to operate as a derivatives exchange and clearinghouse.
This acquisition provides the necessary regulatory framework for the platform to offer its products legally.
The context for this relaunch is highly favorable. The prediction market industry has “exploded” since Kalshi Inc., a direct competitor, won a key court case against U.S. regulators last year.
That victory allowed Kalshi to begin offering “event contracts,” such as the outcome of presidential elections, setting a precedent. Driven by this boom and a previous funding round that turned its founder, Shayne Coplan, into a billionaire, Polymarket returns to the U.S. seeking to raise funds at an astonishing valuation of between $12 billion and $15 billion.
