In the world of global prediction markets, Polymarket stands out as the largest of its kind. Its primary area of expertise lies in facilitating trading on topics of frequent and fervent debate, such as politics, sports, cryptocurrency, current happenings, and many more. Polymarket caters to the rapidly increasing demand for betting not only on conventional sports competitions but also on real-world events, the latter being widely acknowledged in the United States as “event contracts”.
Despite the appreciation enjoyed by Polymarket worldwide, services are not available for US residents. The hindrance happens to be the result of a consensus achieved between the firm and the United States Commodity Futures Trading Commission (CFTC) — an autonomous federal agency tasked with probing commodity fraud, hedge fund fraud and other related activities, dating back to 2022.
Notwithstanding the exclusion from the US market, Polymarket successfully completed another round of funding, putting the company’s total funding considerably over the $70 million mark. According to reports by CoinDesk, the recent series B funding round was headed by Ethereum co-founder Vitalik Buterin, alongside famous billionaire, venture capitalist, and political activist Peter Thiel. Thiel’s renowned Founders Fund was acknowledged as one of the major investors in the round, securing $45 million.
As aforementioned, this latest injection of funds brings Polymarket’s total backing to over $70 million. This funding round was preceded by a series A round helmed by General Catalyst, raising an additional $25 million. This information had not previously been public knowledge, as clarified by Polymarket’s founder Shayne Coplan.
Shifting Sands: The Future of Political Betting in the US
This new round of funding occurs amid a time of unpredictability in regards to the future of political betting, particularly within the US. The CFTC recently disclosed their aspirations to terminate derivative betting in areas of sports and politics. Following this announcement, a Notice of Proposed Rulemaking was issued, contemplating amendments to the event contracts language within the Commodity Exchange Act.
At present, the CFTC already imposes restrictions on derivatives and event contracts related to examples such as terrorism, assassinations, and warfare. Furthermore, the Commission denies permits for bets related to events considered as acting “contrary to the public interest”.
In today’s market, Kalshi holds the distinction of being the sole CFTC-regulated prediction market platform. Its competitors, however, include firms such as PredictIt. Both have previously lodged legal action against the Commission. While a potential ban from the CFTC could potentially disrupt these platforms, it is unlikely to impact Polymarket, given that the facilities are already prohibited within the US.
