Polymarket's November Champion Returns! Teaming up with PrizePicks to re-enter the US market

Cryptocurrency prediction market platform Polymarket announced a partnership with fantasy sports app PrizePicks, stating that it will help PrizePicks offer its users the opportunity to bet on the outcomes of specific event contracts. According to Bloomberg, Polymarket plans to relaunch in the United States later in November.

Polymarket and PrizePicks Collaborate to Open New Markets

(Source: PRNewswire)

Polymarket is working with another major U.S. platform that allows customers to place sports bets. The prediction market platform announced Tuesday a partnership with fantasy sports app PrizePicks. Unlike traditional betting platforms, PrizePicks primarily focuses on fantasy sports games, where users select players based on their performance in specific sports and place bets accordingly. This model is very popular in the U.S. because it introduces skill and strategy elements into traditional sports betting, attracting a large number of young, data-savvy users.

Self-described as the world’s largest prediction market, Polymarket states it will help PrizePicks provide its users with the ability to bet on the outcomes of specific event contracts, including those related to entertainment or cultural activities. This expansion extends PrizePicks’ scope from purely sports to a broader prediction market, where users can forecast not only player performance but also outcomes of political elections, entertainment awards, economic data, and more.

Many anticipate that prediction markets will become a significant growth area, especially in the U.S., where sports betting already generates billions of dollars annually. For PrizePicks and major sports betting platforms like DraftKings, this also presents an opportunity to serve customers in states where traditional gambling is prohibited. U.S. state regulations on gambling vary greatly—some states ban it entirely, while others fully open up. Due to their classification as “skill games,” prediction markets may be categorized differently from traditional gambling, potentially allowing them to operate legally in more states.

Through the partnership between Polymarket and PrizePicks, the latter “will integrate Polymarket’s activity contracts… providing fans with a new, dynamic way to interact with the world around them.” This integration is not just a technical API connection but an innovative business model. PrizePicks’ user base will provide Polymarket with a large potential customer pool, while Polymarket’s prediction market technology and liquidity will enable PrizePicks to offer richer products.

PrizePicks CEO Mike Ybarra expressed optimism about the partnership in an interview with CNBC on Tuesday. He said, “This is not only about expanding our customer base but also about entering new states like Washington and welcoming millions more into the PrizePicks environment.” This statement reveals the strategic intent: by leveraging the regulatory positioning of prediction markets, PrizePicks can enter states where traditional sports betting is banned, significantly expanding its market reach.

PrizePicks’ Regulatory Advantages and Risk Management

PrizePicks claims to be the only platform of its kind registered as a Futures Commission Merchant (FCM) with the U.S. National Futures Association (NFA), and states it can offer derivatives contracts permitted by the CFTC through partnerships with federally regulated exchanges. This regulatory qualification is PrizePicks’ biggest competitive advantage, providing legitimacy and trust—crucial in the highly regulated U.S. financial market.

FCM status requires compliance with strict capital requirements, customer fund segregation rules, and regular audits. While these regulatory obligations increase operational costs, they also protect users and reduce the risk of platform insolvency or misappropriation of customer funds. In the crypto and betting sectors, regulatory compliance is often a key differentiator between sustainable long-term businesses and short-term speculative platforms.

When CNBC asked whether allowing bets on potentially manipulated events could pose problems, PrizePicks CEO Ybarra stated the company would approach prediction markets cautiously. “We won’t offer all the services available on the market,” Ybarra said. “We will carefully select options that align with our players’ interests and are fair for everyone.” This risk-conscious stance demonstrates PrizePicks’ understanding of the ethical and legal issues that prediction markets can raise.

PrizePicks’ Regulatory Advantages

NFA-Registered FCM: The only fantasy sports platform with futures commission merchant status

CFTC Regulatory Framework: Partnering with federally regulated exchanges to offer compliant derivatives contracts

Selective Market Strategy: Carefully choosing event types to avoid manipulation or controversial markets

This risk management approach is equally important for Polymarket. In 2024, Polymarket gained fame for its accurate predictions during the U.S. presidential election but also faced scrutiny over market manipulation and compliance issues. Partnering with highly regulated platforms like PrizePicks can demonstrate Polymarket’s commitment to regulatory standards.

DraftKings Joins the Fray, Making Prediction Markets a Strategic Focus

DraftKings also plans to collaborate with Polymarket, further indicating that prediction markets are becoming a strategic focus for mainstream sports betting platforms. The company’s CEO stated last week during earnings calls that prediction markets could help expand its customer base. Polymarket will serve as the designated clearinghouse for DraftKings’ upcoming prediction markets. Previously, DraftKings acquired Railbird Technologies, a CFTC-regulated designated contract market.

DraftKings’ involvement adds significant weight to Polymarket’s U.S. strategy. As one of the largest online sports betting platforms in the U.S., with a valuation exceeding $15 billion and licenses in over 20 states, DraftKings provides immediate access to millions of active users familiar with online betting and risk management.

Polymarket’s Dual-Giant Partnership Strategy

PrizePicks Focus: Fantasy sports users, young and tech-savvy, suitable for cultural and entertainment prediction markets

DraftKings Focus: Traditional sports betting users, mature with substantial funds, suitable for political and economic prediction markets

This diversified partnership approach allows Polymarket to cover different user segments. PrizePicks’ users tend to be younger and more open to innovative prediction formats, while DraftKings’ users are more mature and financially robust. Serving both groups maximizes Polymarket’s market penetration in the U.S.

From a competitive perspective, prediction markets are emerging as the next frontier in the betting industry. Traditional sports betting markets are highly saturated, with major players competing through pricing and marketing. Prediction markets, as an emerging category, offer differentiation opportunities. Polymarket aims to position itself as the “New York Stock Exchange of prediction markets,” with a B2B2C model that offers greater scalability than direct consumer targeting.

Acquisition of QCX Paves the Way for Re-entry into the U.S.

In July, Polymarket acquired licensed derivatives exchange and clearinghouse QCX, preparing for a return to U.S. operations. This acquisition was a crucial step in Polymarket’s U.S. strategy, addressing the biggest regulatory hurdle: legal operating licenses. As a CFTC-regulated designated contract market (DCM), QCX holds full licenses to provide derivatives trading services. Through this acquisition, Polymarket gained these valuable regulatory permissions, enabling it to legally offer prediction markets in the U.S.

Bloomberg reports that Polymarket plans to relaunch in the U.S. later this month. The timing is carefully chosen: the U.S. presidential election just concluded, and Polymarket’s strong performance in election predictions has built significant brand recognition; strategic partnerships are in place to immediately drive traffic upon relaunch; and the regulatory framework is largely clarified, reducing compliance risks.

Polymarket’s re-entry is not just a product relaunch but a strategic move with a new compliance framework and partnerships. Unlike its 2021 exit after a $1.4 million CFTC fine, this time Polymarket benefits from QCX’s regulatory license, collaborations with PrizePicks and DraftKings, and its reputation built during the 2024 election cycle. These advantages greatly increase the likelihood of a successful U.S. comeback.