A study shows Americans wagered $34 billion in offshore prediction markets, with projections suggesting this could rise to $133 billion by 2030.
Americans Invest Heavily in Offshore Prediction Markets
A recent report from the Coalition for Prediction Markets reveals that American users engaged in offshore prediction markets with total wagers reaching $34 billion over the past year. This significant figure reflects a growing trend among U.S. participants in markets that operate outside the regulatory oversight of U.S. authorities.
The study, led by Harry Crane, a Rutgers professor and member of the CFTC Innovation Advisory Committee, indicates that U.S. users contributed between 12.5% and 31.5% of the overall prediction market activity, which includes both regulated and unregulated platforms. Notably, Polymarket, the largest offshore platform, saw U.S. participants contribute an estimated $10.6 billion to $26.7 billion of its total $55.6 billion trading volume, despite restrictions against their participation.
Looking ahead, projections suggest that the volume of U.S. trading in these offshore markets could soar to $133 billion annually by 2030. This forecast assumes that market share dynamics between regulated and offshore platforms remain stable.
@HarryDCrane found that U.S. participants account for an estimated $11 billion to $34 billion in offshore prediction market activities, a conservative estimate.
The Coalition, which encompasses regulated market operators like Kalshi and Crypto.com, underscores the risks associated with offshore platforms, as they lack the regulatory safeguards present in the U.S. market. The report highlights that many Americans are using VPNs to access these unregulated platforms, which offer contracts on sensitive topics without adhering to customer verification or anti-money laundering protocols.
Despite recent regulatory efforts by the CFTC, including a ban on betting related to war or assassination outcomes, the agency faces ongoing challenges regarding its jurisdiction over these markets. New CFTC Chairman Mike Selig has asserted the agency's authority, while lawmakers, including Senator Elizabeth Warren, have raised concerns about the CFTC's capacity to effectively regulate these rapidly evolving platforms.
