Days after a report that the US Justice Department and Commodity Futures Trading Commission (CFTC) ended their investigations into Polymarket, the prediction market announced it has acquired QCX, a CFTC-licensed derivatives exchange.
The $112 million deal forges a clearer and quicker path for Polymarket’s return to the US.
“The predictions marketplace is buying a little-known derivatives exchange called QCX, that will allow Polymarket to legally re-enter the US, according to people with knowledge of the matter,” Bloomberg News reports (h/t Alfonso Straffon). “The move will formally open the betting site to US users after its surging popularity in 2024 when users placed millions of dollars of wagers on President Donald Trump returning to office.”
“Polymarket is the largest prediction market globally and has become synonymous with understanding the probability of current events,” Polymarket Founder and CEO Shayne Coplan, already confident in reopening in the US since the election of Donald Trump, said in a press release announcing the QCX deal.
“… with the acquisition of QCEX, we are laying the foundation to bring Polymarket home — re-entering the US as a fully regulated and compliant platform that will allow Americans to trade their opinions.”
The acquired holding company, which includes clearing house QC Clearing LLC, is collectively called “QCEX”.
QCX reportedly applied for a CFTC license in 2022 but did not receive it until July 9.
Said QCEX Founder Sergei Dobrovolskii, “When we began the process to obtain our DCM & DCO licenses [from the CFTC] over 4 years ago, the prediction market was in its infancy. But we have long believed in its potential to change the way people access and understand information and express their views on that information.”
Competition for Kalshi
While the Polymarket/QCEX press release does not mention sports specifically, sports are coveted by prediction markets.
Kalshi has had the US prediction markets space virtually to itself, but stiffer competition was inevitable – and Polymarket won’t be the only new player.
Last week, PredictIt announced a loosening of CFTC restrictions, which could portend an entry into sports. Also, DraftKings is reportedly in talks to buy Railbird Exchange, and other sports betting operators are exploring avenues into prediction markets, too.
The gambling industry’s eyes will remain peeled on prediction markets as football season approaches.
Polymarket and election betting
In addition to sports, betting on elections has seen impressive volume and has massive potential going forward.
According to NBC, more than $3.6 billion was staked on the 2024 US Election, including $1.5 billion on Donald Trump to win and $1 billion on Kamala Harris. Polymarket was ordered in January 2023 to stop accepting orders from the U.S. in Jan. 2023, but some of that money is believed to have originated in this country.
Despite the US ban, Polymarket handled around $700 million in trades related to Super Bowl LIX between the Eagles and Chiefs. Expect these numbers only to increase.
