Polymarket Seeks CFTC Approval to Return to US Market

U.S. Army soldier Gannon Ken Van Dyke is accused of using classified information obtained through his role in Operation Absolute Resolve to trade Polymarket event contracts tied to Venezuela and Nicolás Maduro. The Justice Department and the Commodity Futures Trading Commission brought parallel criminal and civil actions on April 23, 2026. The case is an early test of whether prediction-market contracts qualify as swaps under the Commodity Exchange Act and whether federal insider-trading rules extend to wagers based on confidential government information.

Prosecutors say Van Dyke placed roughly $33,000 in trades between Dec. 27, 2025, and Jan. 26, 2026, earning about $409,881; he has pleaded not guilty. The CFTC sought permission on Aug. 21 to file an amicus brief arguing the contracts were swaps within its jurisdiction. Van Dyke’s lawyers objected on Aug. 24, accusing the regulator of using the criminal case as a back door to advance its own enforcement position. Judge Margaret M. Garnett allowed the brief that day and gave the parties until Sept. 9 to submit supplemental responses.

Prediction markets let users trade event contracts tied to sports, elections, weather and other outcomes. The core legal dispute is whether those products are gambling subject to state control or derivatives governed by the federal Commodity Exchange Act. Minnesota became the first U.S. state to enact an outright ban, escalating a nationwide jurisdictional fight between state gaming authorities and the Commodity Futures Trading Commission, which says it has exclusive oversight of swaps listed by federally regulated exchanges including Kalshi and Polymarket US.

U.S. District Judge Katherine Menendez on July 27 issued a preliminary injunction blocking Minnesota’s law days before its Aug. 1 effective date. The measure would make operating or assisting a prediction market a felony. Menendez said the CFTC, Kalshi and Polymarket were likely to succeed in showing that the Commodity Exchange Act preempts the statute for many event contracts, while enforcement would cause irreparable harm. The order remains in place until a final ruling on the merits, giving the platforms and federal regulator an interim victory.

Prediction markets let traders take positions on outcomes ranging from sports contests to elections. Their rapid expansion has put the Commodity Futures Trading Commission at the center of a jurisdictional fight over whether event contracts are federally regulated derivatives or gambling subject to state oversight. For CFTC-regulated designated contract markets, self-certification can speed listings, but exchanges must still show that each product complies with the Commodity Exchange Act, settlement rules and core principles.

The CFTC’s Division of Market Oversight issued its latest advisory on July 24, warning platforms including Kalshi, Coinbase, Polymarket and Crypto.com against broad, template-style filings that combine many contract permutations. Each proposed variation must include its terms, underlying commodity, settlement methodology, data sources and compliance analysis under Regulation 40.2, the agency said. The notice was the regulator’s second warning in several months, following guidance on March 12, though closely related contracts may still be certified as a class.

Prediction markets allow users to trade event contracts tied to outcomes ranging from elections and economic data to sports contests. The growth of platforms including Polymarket and Kalshi has sharpened a jurisdictional dispute: whether such products are financial derivatives overseen nationally by the Commodity Futures Trading Commission, or wagers subject to state gambling laws. The distinction matters because it could determine licensing, consumer-protection and market-integrity standards across the United States.

A House Agriculture subcommittee recently held a hearing to consider whether Congress should revise the rules as prediction platforms expand into sports-related contracts. Lawmakers focused on the boundary between the CFTC’s federal authority and enforcement by gambling regulators in all 50 states. Crypto and blockchain industry groups warned that a state-by-state approach could fragment national financial-market oversight, expose platforms to conflicting requirements and raise compliance costs.

Prediction markets have traditionally operated on a fully funded basis, requiring users to put up the entire amount of a wager. As the sector moves into the mainstream, leverage and margin trading are becoming critical to attracting institutional capital and expanding the market. The shift could lower users' funding requirements and boost liquidity. It also marks prediction markets' formal evolution toward traditional financial derivatives, setting up a pivotal battle between the two market leaders for a share of the regulated U.S. market.

A Polymarket subsidiary filed with the National Futures Association on July 3, 2026, seeking registration as a futures commission merchant to offer margin trading. Rival Kalshi had already secured the status in March of the same year. If Polymarket subsequently wins approval from the U.S. Commodity Futures Trading Commission, competition between the two companies in leveraged contracts in the United States is set to intensify significantly.

Polymarket allows users to trade on the probabilities of outcomes in politics, sports and other events. On January 3, 2022, the US Commodity Futures Trading Commission fined the company $1.4 million for offering event-based binary options without registration and ordered it to stop serving US customers. That regulatory history has made compliance and market credibility central to the platform’s return.

A July 8, 2026, report said Polymarket was marketing itself in the United States through TikTok influencers, X and partnerships with Major League Baseball, CNBC and CNN, among others. Its X account had about 1.7 million followers. The company acquired CFTC-licensed exchange QCEX for $112 million in July 2025 and launched a regulated real-money sports prediction app at the end of that year. However, just one month before the report, influencers were found not to have clearly disclosed sponsorships.

Polymarket is a prediction market where event contracts allow users to trade on outcomes including elections and sporting events. On January 3, 2022, the CFTC found that it was operating an unregistered trading platform, imposed a $1.4 million penalty and ordered it to exit the United States. As the platform returns to the U.S. market, questions over whether its marketing misled consumers are also affecting the division of gambling oversight among federal, state and tribal governments.

Republican Senator John Curtis and Democratic Senator Adam Schiff wrote to CFTC Chairman Michael Selig on June 25, requesting by July 10 an explanation of whether the agency was investigating. A June 20 report reviewed more than 1,100 videos from 10 creators and found that about 70% showed simulated trades, presenting nearly $1.9 million in fictitious profits. Polymarket has begun auditing the content.

Polymarket is a blockchain-based decentralized prediction market where users can trade on the outcomes of political, economic and other events. Prediction markets may face restrictions under Japan’s gambling laws, making government approval critical to Polymarket’s expansion in Asia and its approach to regulatory compliance. Approval would also affect the platform’s strategy to reduce its reliance on the U.S. market and regulatory environment.

Polymarket is planning to begin lobbying in Japan as it seeks a license to operate a prediction market by 2030. The effort is being led by Mike Eidlin, Japan head of cryptocurrency exchange Jupiter. No application date, investment amount or specific launch schedule has been announced. The immediate challenge is clarifying and overcoming barriers posed by Japan’s gambling laws.

Polymarket is a prediction-market platform where participants trade contracts tied to the outcomes of political, economic and other events. The proposed product uses a parlay structure combining multiple outcomes. The regulatory positions of the U.S. Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) will influence whether prediction markets can enter the mainstream financial-products ecosystem.

Polymarket has submitted a self-certification filing for “combinatorial outcome contracts” to the CFTC, with a launch expected as early as May 21. The filing did not disclose any trading amount. Meanwhile, SEC Chair Paul Atkins announced a public request for input on new fund products, including event-contract ETFs, signaling that the regulatory debate has expanded beyond individual prediction contracts to fund structures available to retail investors.

Polymarket is a decentralized prediction market where traders use crypto assets to wager on the probability of events. Its nuclear contracts allowed them to bet on whether a nuclear explosion would occur by a specified deadline. While such markets can aggregate risk expectations, they have raised ethical and regulatory concerns because people with access to military intelligence could profit and mass casualties could be commodified. The U.S. Commodity Futures Trading Commission is also tightening rules for event contracts.

Amid the conflict involving Iran and growing concerns about insider trading on wars, Polymarket removed its long-term nuclear detonation markets on March 4, 2026. A 2023 contract at one point implied a 19% probability of a nuclear explosion and drew nearly $700,000 in trading volume, while a contract expiring in June 2025 was once priced at 12% and recorded more than $1.7 million in cumulative volume. On May 10, 2024, the CFTC proposed barring regulated platforms from listing contracts involving war, terrorism or assassination.