Polymarket sees 266% surge in US exchange activity amid ongoing regulatory challenges
US trading activity on Polymarket exploded to $14.77 billion by October, with sports and combination contracts driving the growth, while federal and state authorities continue their dispute over prediction market regulation.
Activity on Polymarket's US-based exchange expanded by more than three times during the period from June through October, climbing approximately 266% while the platform remained under examination from both state and federal authorities.
The platform's monthly trading activity climbed to $14.77 billion from $4.04 billion across this timeframe, based on information from TickerTracker, an analytics platform that calculates trades using the contracts' complete payout value.
In statements to CNBC on Tuesday, Polymarket disclosed that its annualized revenue had exceeded $1.8 billion, representing an increase from the more than $1 billion figure reported in June.
Combination contracts, which merge multiple predictions together into one single bet, represented $8.6 billion, accounting for 58.2%, of the total October volume. Sports-related contracts came in as the second-largest segment at $4.57 billion, representing 31% of the total.
The US division of the platform has experienced rapid expansion since the company broadened access beginning in May, even as individual states have raised questions about whether federally regulated prediction markets are permitted to provide sports contracts in the absence of state gambling licenses. Polymarket started allowing US traders onto the separate exchange in late 2025, a full three years following a settlement agreement with the Commodity Futures Trading Commission (CFTC) that resulted in the blocking of US trading on its international platform.
The expansion also comes on the heels of a spike in sports-focused trading activity throughout the FIFA World Cup, which took place from June 11 to July 19. Soccer-related contracts produced $1.81 billion in trading volume during June, representing an increase from $85.4 million in May, based on TickerTracker data.
Political prediction markets similarly experienced heightened activity in connection with the US midterm elections. Contracts related to elections produced $108.2 million in trading volume on the US exchange operated by Polymarket over the initial 10 days of November, in comparison to $16.6 million across the entire month of September. Even with this growth, political markets represented only 2.2% of the platform's overall November trading volume.
In other developments, Polymarket is actively pursuing a $1 billion funding round at a reported post-money valuation of $21 billion. The investment firm 1789 Capital, where Donald Trump Jr. serves as a partner, is reportedly spearheading the round with an anticipated contribution of approximately $300 million.
Polymarket faces mounting legal challenges
Notwithstanding these impressive figures, Polymarket remains subject to regulatory scrutiny across multiple fronts. Earlier this year, the CFTC was reportedly conducting an investigation into Polymarket, while US Senators John Curtis and Adam Schiff independently called upon the regulator in June to investigate allegations that the company compensated social media influencers for promoting fabricated trades.
In response to these allegations, the company informed Cointelegraph that it was "conducting a comprehensive audit of active promotional content to ensure it complies with our standards, as well as applicable regulatory and legal disclosure requirements."
Polymarket also finds itself among multiple prediction market operators confronting legal challenges from individual US states. In September, New York Attorney General Letitia James filed a lawsuit against the company, claiming that its sports-related event contracts were in violation of state gambling laws. This lawsuit represents part of a larger wave of state enforcement actions targeting prediction market platforms, including Kalshi, centered on the question of whether their contracts are subject to federal commodities regulation or state gambling laws.
The CFTC has maintained its position regarding its authority to regulate prediction markets, engaging in legal action that involves 10 states concerning efforts to enforce state gambling laws against these platforms.
This jurisdictional conflict may eventually be decided by the US Supreme Court. In September, officials from New Jersey filed a petition with the court requesting that it hear their case against Kalshi, pursuing a ruling that would provide clarity regarding which authorities possess jurisdiction over sports-related prediction markets.