Polymarket returns to the US market at the end of November, with a $15 billion valuation predicting how the prediction market will reshape the sports betting landscape.

According to a report by Bloomberg, the prediction market platform Polymarket plans to return to the U.S. market by the end of November, focusing on sports betting. This strategic return marks a significant turnaround for the company, which was expelled overseas in 2022 due to illegal trading allegations and paid a $1.4 million fine. By acquiring QCX, a company holding a CFTC license, Polymarket has successfully opened up a Compliance channel, and its return could reshape the landscape of the U.S. prediction market, triggering a significant drop in stock prices for traditional betting companies like DraftKings.

Return Strategy and Time Planning: Accurately Grasping the Cycle of Sports Events

phased launch strategy

According to informed sources, Polymarket plans to launch its operations in the United States by the end of November, but it will not be fully open to all users initially. This cautious timing for the launch is quite strategic—it coincides perfectly with the peak traffic of the American football and basketball seasons, bringing natural user activity and trading volume to the platform.

Unlike the previously completely open model, this return adopts a gradual access mechanism, which not only complies with regulatory requirements but also helps control initial operational risks. This strategy reflects the company's mature transformation after experiencing compliance setbacks, demonstrating a profound understanding of the complex regulatory environment in the United States.

valuation leap and capital layout

While preparing for its return, Polymarket is seeking to raise a new round of financing with a valuation between $12 billion and $15 billion. This valuation level represents a significant increase from previous stages, making founder Shayne Coplan a self-made billionaire. The strong interest from the capital markets confirms investors' confidence in the prospects of the prediction market and provides ample financial support for the company's expansion in the United States.

Compliance Path Breakthrough: The Turnaround Journey from Being Fined to Obtaining a License

Key acquisition to overcome regulatory barriers

The key to Polymarket's return to the US market lies in the successful acquisition of QCX. This company holds a derivatives exchange and clearinghouse license issued by the Commodity Futures Trading Commission (CFTC), providing a legal operational basis for Polymarket.

This acquisition took place earlier this year when the US Department of Justice and the CFTC concluded their investigation into the crypto platform. By obtaining a license rather than applying directly, Polymarket cleverly circumvented the complex approval process, significantly shortening the timeline for its return.

Changes in the regulatory environment of the industry

The overall regulatory environment for prediction markets is undergoing positive changes. Last year, Polymarket's competitor Kalshi Inc. won a lawsuit against U.S. regulators, gaining approval to offer trades on presidential election outcomes through so-called “event contracts.” This precedent has created a more favorable regulatory outlook for the entire industry and also paved the way for Polymarket's return.

Market Competition Landscape: The Duel Between Traditional Gambling and Prediction Markets

market reaction and stock price fluctuation

The news of Polymarket's return immediately caused a stir in the capital markets. Following the announcement, the stock prices of U.S. gambling companies fell, with DraftKings down 9.2% and Flutter Entertainment, the owner of FanDuel, down 4.7%. This market reaction clearly illustrates that the traditional gambling industry views prediction markets as a significant threat.

On the same day, Trump's social media company announced its entry into the field through a partnership with Crypto.com, a competitor of Polymarket, further intensifying the competitive landscape in the industry. This series of dynamics indicates that prediction markets are becoming a new track for various capital to compete for.

Business model innovation and differentiation

Compared to traditional sports betting, prediction platforms like Polymarket offer a wider variety of event trading options, ranging from Oscar winners to central bank interest rate decisions. This diversity attracts a broader user base, particularly the younger generation with limited interest in traditional sports betting.

In addition, prediction markets utilize federal financial licenses to operate in states where sports betting was previously prohibited, and this innovative model greatly expands market boundaries. As more states consider relaxing related restrictions, the growth potential of prediction markets will be further unleashed.

Legal Challenges and Industry Prospects: Moving Forward in Uncertainty

State-level regulatory barriers remain

Despite positive signals at the federal level, prediction markets still face legal uncertainty in various states. Several state regulatory agencies have made it clear that prediction markets cannot operate within their jurisdictions. This fragmented regulatory landscape adds complexity to business operations.

This Monday, Kalshi sued the New York Gaming Commission, accusing the agency of trying to regulate sports betting operations that exclusively fall under federal jurisdiction, overstepping its authority. The outcome of this lawsuit could create important legal precedents for the industry.

The entry of traditional financial institutions.

Large financial exchanges and betting companies are actively seeking to enter this field. According to Bloomberg, CME Group Inc. plans to launch its own sports betting contracts by the end of this year after establishing a partnership with FanDuel. The entry of traditional giants not only validates the market potential but also indicates that competition will intensify further.

User Acquisition and Platform Preparation: From Waiting List to Full Launch

carefully designed launch process

Polymarket is currently gradually onboarding users through a waitlist mechanism, with the company stating that the service will be available soon. Their statement on the website: “We are working hard to prepare for the launch of the platform in the US - meanwhile, please provide your phone number below to receive updates,” shows a well-planned market entry strategy.

This invitation-based launch not only creates market scarcity but also ensures that the system can smoothly handle the pressure of user growth. After experiencing previous compliance issues, the company is clearly placing greater emphasis on operational stability and user experience.

technology infrastructure upgrade

To meet the stricter regulatory requirements of the U.S. market, Polymarket is likely to have undergone a comprehensive upgrade of its technological infrastructure. Systems including authentication, transaction monitoring, and fund settlement need to comply with U.S. standards, and these preparations form the basis for the platform's smooth return.

Conclusion

The return of Polymarket to the US market marks a crucial turning point in the development of the prediction market industry. From being driven out by regulation to returning with a license, this journey not only reflects the company's ability to strategically adjust but also demonstrates the gradual acceptance of innovative financial technology by the United States.

For the U.S. gambling and prediction market, the return of Polymarket could become a catalyst for reshuffling the industry. Its unique business model, precise timing, and innovative compliance path provide valuable development insights for peers.

However, regulatory challenges have not been completely eliminated, and legal obstacles at the state level and competitive pressure from traditional giants still persist. Whether Polymarket can develop robustly in the complex U.S. regulatory environment will depend on its continued Compliance capabilities and the maintenance of its differentiated competitive advantages.

As the launch date in November approaches, the entire industry is closely monitoring the progress of this landmark event. Regardless of the outcome, Polymarket's return journey to the U.S. has become a classic case of the interaction between fintech and regulation, providing important references for the compliance development of subsequent innovative enterprises.