Polymarket, an online betting exchange specializing in prediction markets, is reportedly exploring a deal that would place its valuation at $9 billion, according to The Information. This marks a dramatic increase from its $1 billion valuation only three months ago, when it secured funding in a round led by Peter Thiel's Founders Fund.
Key Takeaways
- Polymarket is weighing a deal that could value the company at $9 billion
- The Commodity Futures Trading Commission has eased restrictions, allowing Polymarket to operate in the U.S.
- Rival Kalshi has also seen its valuation climb
The company has benefited from shifting regulatory conditions. The Commodity Futures Trading Commission (CFTC), which barred Polymarket from offering prediction contracts in 2021, recently allowed the platform to operate domestically. This reversal has opened significant growth opportunities.
Polymarket enables users to wager on outcomes of elections, legal rulings, and global events. Last year's U.S. election cycle saw it handle more than $8 billion in bets, ahead of mainstream sports betting operators in terms of online traffic.
Kalshi, its competitor, also experienced similar traction as its valuation rose this year to $5 billion from $2 billion. Polymarket's growth has also attracted politically influential backers. Donald Trump Jr.'s venture firm, 1789 Capital, invested tens of millions of dollars in the company, with Trump Jr. joining as an advisor.
CFTC decision strengthens Polymarket's U.S. position
Regulatory developments in the U.S. have reinforced Polymarket's growth prospects. Earlier this month, the CFTC's Division of Market Oversight and Division of Clearing and Risk issued a no-action letter regarding swap data reporting and recordkeeping rules for specific event contracts offered through the derivatives exchange and clearinghouse QCEX.
The approval came shortly after Polymarket finalized its $112 million acquisition of QCEX, providing the company with the regulatory foundation to operate legally under U.S. law. By securing this foothold, Polymarket has addressed one of the primary barriers to its expansion in the domestic market.
Interest in prediction markets has surged alongside these developments. Kalshi, for example, raised $185 million at a $2 billion valuation earlier this year. The company has also requested approval to introduce multi-outcome event contracts, a structure similar to parlay bets in sports wagering.
Massachusetts lawsuit targets Kalshi's sports betting activity
Despite federal regulatory support, state-level scrutiny remains a challenge for prediction market operators. Massachusetts Attorney General Andrea Campbell has filed a lawsuit against Kalshi, alleging that it is effectively running an unlicensed sports betting business. The case seeks to halt Kalshi's operations in the state.
The complaint alleges that Kalshi accepted more than $1 billion in sports-related wagers during the first half of 2025 without the approvals required of licensed sportsbooks. Regulators claim that over 75% of Kalshi's trading volume is tied to sports markets.
The filing also points to behavioral design features resembling online gambling products and highlights Kalshi's introduction of parlay-style contracts. Massachusetts officials argue that Kalshi's marketing and operations mirror those of licensed operators, while avoiding state oversight and tax obligations.
