Poker Writer
Polymarket recently opened trading on whether sports prediction markets will be banned in the U.S. this year.
That’s an ironic speculation on their own future legality, since Polymarket itself is a prediction contract provider. Though not currently operating in the U.S., Polymarket has received Commodity Futures Trading Commission (CFTC) permission to return. Several years back, Polymarket paid a seven-figure fine and vacated the states. It repositioned its operation to serve international customers.
On Thursday, the market in question opened with the official rules stating:
This market will resolve to ‘Yes’ if, by December 31, 2025, 11:59 PM ET, sports event contracts listed by a CFTC-regulated Designated Contract Market (DCM), whether accessed directly or through a Futures Commission Merchant (FCM), are legally prohibited or blocked for users in at least one U.S. state or nationwide. Otherwise, this market will resolve to ‘No.’
The odds opened at 48% before sharply declining to 10% overnight but then rising again to hold steady at 40% on Friday. The spread between Bid and Ask is enormous. Those looking to take a Yes position don’t want to pay much more than 10 cents per share, equating to a chance of about 10%. However, those favoring the No side don’t want to sell Yes much lower than 40 cents.
Liquidity has been very small, so those hoping to glean any real insight from the market will have to wait until someone takes a significant position between those numbers. That may offer some signal.
Polymarket promoted the market on X, with several people chiming in with thoughts on it. Sports betting and gaming lawyer Daniel Wallach shared his opinion:
Ultimately, maybe.
But in 2025? Doubtful.
Just to be ‘banned’ in one state, there would need to be multiple court rulings per state — grant or denial of a PI motion (depends on identity of movant) and then failure to get stay or injunction pending appeal from several courts.
Others noticed the trolling and ironic nature of a prediction market posing a market on whether or not prediction markets will be banned. The meta-layered nature of the market evokes comparisons to the film “Inception.”
“Markets on markets on markets,” said one gaming industry entrepreneur.
States Challenging Prediction Markets
The basis for the question comes from the friction between states and prediction markets in recent months. After Kalshi and Robinhood started adopting football prediction markets in August, the push to ban or limit them became stronger.
New Jersey and Nevada sent cease-and-desist letters to prediction markets for their foray into sports prediction markets.
Ohio turned the heat up on prediction markets even more this week, as the Buckeye State sent a cease-and-desist letter to Kalshi, the largest state to do so thus far. It is among several states that have threatened sportsbooks with their licenses if they choose to begin offering prediction contracts.
All the while, prediction market operators’ valuations continue to grow. The owners of the New York Stock Exchange taking a massive stake in Polymarket may have provided the strongest signal yet of their legitimacy, even as the battles only begin to unfold at the state level.
