The CFTC’s New Rulebook Doesn’t Reach a $34 Billion Offshore Prediction Market

Why It Matters

By tightening rules only on compliant exchanges, the CFTC may inadvertently drive U.S. betting dollars to offshore platforms that lack oversight, eroding market integrity and consumer safeguards.

Key Takeaways

• Offshore prediction markets handle $11‑34 billion from U.S. users.
• CFTC rulebook regulates Kalshi but omits Polymarket.
• Regulated volume grew 866% vs 179% offshore growth.
• Projected U.S. offshore volume could hit $133 billion by 2030.

Pulse Analysis

The Commodity Futures Trading Commission’s latest rulebook marks a watershed for domestic prediction‑market operators, laying out licensing, age limits, and product design standards across a sprawling 267‑page document. Yet the agency deliberately sidestepped offshore platforms, leaving entities such as Polymarket outside its jurisdiction. This omission creates a regulatory asymmetry: compliant firms must adhere to stricter consumer‑protection measures while offshore rivals operate with virtually no oversight, a disparity that could reshape where U.S. traders place their bets.

Data from a Crane & Zeng Consulting brief commissioned by the Coalition for Prediction Markets quantifies the gap. Approximately 30% of Polymarket’s $55.6 billion trailing‑twelve‑month volume—roughly $11‑34 billion—originates from U.S. users, while the broader offshore ecosystem processes $93.9 billion versus $74 billion on regulated platforms. Although regulated volume exploded 866% from 2024 to 2025, offshore growth, though slower at 179%, still represents a substantial share. The report warns that if current trends continue, U.S.-attributable offshore activity could swell to $133 billion annually by 2030.

The practical impact is clear: stricter rules on platforms like Kalshi may make offshore alternatives more attractive, especially for sports‑related contracts where age and product restrictions are tighter domestically. This dynamic runs counter to the CFTC’s stated goal of protecting consumers and could siphon liquidity away from regulated markets, weakening price discovery and increasing fraud risk. Policymakers will need to consider cross‑border coordination or extended jurisdictional reach if they wish to preserve market integrity and keep U.S. capital within a transparent, supervised ecosystem.