Blockchain prediction platform Polymarket is set to disrupt the U.S. sports betting market, with stocks already reacting.
Summary
- Polymarket will likely return to the U.S. in November
- The platform is set to take on the U.S. sports betting market
- Shares of Flutter and DraftKings fell 3% and 5% after news broke
Polymarket is planning its U.S. return, with its eyes on the sports betting market. On Tuesday, October 28, Bloomberg reported that the prediction platform is set to return to the U.S. in November, after it left the market in 2022.
The report claims that the company has plans to take on sports betting, potentially disrupting more traditional online gambling platforms. Namely, the company is reentering with a licensed, sports-focused product designed to comply with stringent U.S. regulations.
According to market reaction, traders believe that Polymarket has the potential to disrupt the traditional gambling platforms. Namely, following the news, shares of sports betting sites Flutter and DraftKings fell 3% and 5% respectively.
Polymarket is reportedly prioritizing high-volume sporting events, including the NFL, NBA, and other major leagues. The initial product rollout, planned for November, will be open to select users.
Can Polymarket disrupt sports betting?
The news comes after Polymarket acquired QCX, a Florida-based exchange with a Commodity Futures Trading Commission license. The deal gives the betting platform a pathway to offer event contracts, including those focused on sports, under a regulatory framework.
Crucially, the platform also received a no-action letter from the CFTC. This means that the agency doesn’t plan to pursue enforcement action against Polymarket, as long as it meets certain regulatory criteria.
Polymarket exited the U.S. after a legal settlement with the CFTC in 2022, which also forced it to pay a $1.4 million fine. The CFTC alleged that the betting platform offered off-exchange binary options and operated as an unregistered market.