The intimate meal, 60 floors above New York’s financial district, brought together a pillar of the Wall Street establishment and a young crypto upstart.

The host, billionaire septuagenarian Jeffrey Sprecher, CEO of Intercontinental Exchange Inc., the owner of the New York Stock Exchange, arrived in a suit. His guest, 27-year-old Polymarket founder Shayne Coplan, walked in wearing a T-shirt, carrying a disposable water bottle and a paper bag from a bakery.

Over dinner at Manhatta, a high-end Danny Meyer restaurant, Sprecher admitted he’d never used Coplan’s crypto-powered prediction market — it was still closed to US customers at the time. But Coplan’s pitch stuck: a new kind of exchange that makes it possible to bet on politics, sports, culture and just about anything else.

“In 20 minutes, I realized they were onto something,” Sprecher said in an interview. “What they had designed was very profound.”

The investment — of as much as $2 billion — that ICE committed to after that meal was one in a dizzying frenzy of deals that has been announced over the past two months, turning prediction markets from fringe experiment into one of the hottest trends in both Silicon Valley and Wall Street.

Participants are betting that “event contracts” — financial instruments that allow wagers on outcomes in politics, sports and more — can sidestep decades-old rules separating gambling from finance. Proponents promote them as a new way to forecast the future and potentially reshape markets themselves.

The opportunity — and the risk — took center stage this week in Chicago, where Sprecher and other executives gathered for a major trading and derivatives conference. Tarek Mansour, the CEO of Polymarket’s main rival, Kalshi Inc., made an appearance in which he teased several upcoming deals and boasted that prediction markets would become a “trillion-dollar” industry competing with the biggest asset classes.

The scramble to secure investments and strike alliances includes some of the world’s biggest exchanges, gambling giants, trading platforms, VC firms, crypto outfits, pro sports leagues — even the Trump family’s media company. All are trying to stake a claim in a highly contested legal gray zone.

In one case, Polymarket and Kalshi entered into a bidding war to win a partnership with the National Hockey League when it was considering becoming the first professional sports league to officially cooperate with prediction markets, according to people familiar with the negotiations. Eventually, both exchanges paid up to secure the deal.

The NHL declined to comment on the details of the talks. Representatives for Polymarket and Kalshi declined to comment for this story.

Regulatory opening

The recent agreements have helped Kalshi field offers to boost its valuation to more than $10 billion, from $2 billion in June, Bloomberg has reported. Polymarket has followed a similar parabolic ascent and it is now looking to raise additional funds at a valuation over $12 billion — more than 10 times what it was worth just months ago.

Even before the Polymarket investment was announced, ICE and Kalshi had held informal talks, but they never resulted in a deal, people familiar with the matter said. A representative for ICE declined to comment.

Both Kalshi and Polymarket are racing to gain legitimacy and scale, moving quickly into a regulatory opening created by the Trump administration, a sharp shift after years of legal crackdowns on prediction markets. But the backlash is building. Critics warn that embedding gambling into ever more corners of American life could have broad unintended consequences.

“This is a mess for so many reasons,” said Melinda Roth, a visiting associate professor of law at Washington & Lee University, who has written about the legal landscape surrounding event contracts. “We have people taking money they often don’t have and not investing in the stock market or retirement savings.”

WATCH: Trading activity is booming as a new wave of apps strike new partnerships, blending brokerage, betting and social media. George Pyne, CEO of Bruin Capital, former executive at IMG Sports shared his thought on this topic on “Bloomberg Market.”

State gaming agencies and Native American tribes are in their own race to make legal filings arguing that the nascent industry is steamrolling rules meant to protect bettors and gaming integrity.

Privately, though, two state regulators who requested anonymity to speak candidly about ongoing legal struggles, expressed concern about the wealth and power that are increasingly backing prediction markets. One wondered whether the phenomenon of wagering on sports using prediction markets could become too pervasive to rein in. In industry circles too, there is a sense that the fast action by the industry may overpower the legal doubts.

“If there’s enough institutional support and political support, everyone has just sort of spoken about the way they want the world to be,” according to Chris Grove, co-founder of Acies Investments, which backs gaming companies. “It’s what the relevant economic actors and the relevant political figures say.”

Sports betting

The actual trading on prediction markets today is still a tiny fraction of the existing business at traditional exchanges and gambling companies, but momentum is building, and many of the established players are jumping in.

Terry Duffy, the CEO of CME Group Inc., said that he went to the New York offices of the gambling company Flutter Entertainment Plc early this year to personally pitch the company’s CEO on a partnership, which they announced over the summer.

“I had been watching the retail revolution for years and was particularly interested in its evolution into sports,” Duffy said. “The intersection of sports and trading is powerful.”

The two companies are working on a consumer app, FanDuel Predicts, that is set to be released by the end of the year.

The CEO of DraftKings, Jason Robins, questioned whether event contracts could compete with traditional sports gambling at a recent industry conference. But his company also hedged its bet by purchasing a small regulated financial exchange, Railbird, that is set to allow DraftKings to offer event contracts itself.

Jay Snowden, CEO of the casino operator Penn Entertainment Inc., said on a Nov. 6 earnings call that prediction markets are a “major threat to the industry.”

“We’ve got to play some offense here,” he said.

Trump’s Embrace

When Kalshi initially began offering contracts tied to sports games early in the year, just months after it won a court battle to open trading on election results, it was not clear if regulators would allow them to move ahead.

A number of gaming regulators said the activity violated state laws governing sports gambling. Kalshi countered that its products were financial instruments, regulated by the Commodity Futures Trading Commission — not subject to state oversight. It has said that unlike a sportsbook, which sits on the other side of every bet, it offers an exchange where traders with different views can meet.

Kalshi Co-founder Tarek Mansour during an event at Securities and Exchange Commission headquarters on Sept. 29.Photographer: Kent Nishimura/Bloomberg

The CFTC hasn’t intervened. Meanwhile, the Trump family has increasingly aligned itself with the industry. Donald Trump Jr. became an advisor to both Kalshi and Polymarket. And Trump Media & Technology Group took part in a blitz of negotiations this fall with one of Kalshi’s competitors, Crypto.com, ultimately announcing its own marketplace, Truth Predict.

Devin Nunes, who has served as an adviser to President Donald Trump and is the CEO of Trump Media, was a key part of the agreement, which came together in a matter of weeks, according to people familiar with the discussions who asked not to be named because the talks were private.

Polymarket started from behind. It had been closed to US customers since a 2022 settlement with the CFTC. But in July, the CFTC and Justice Department told Polymarket they were ending their investigations of the company. In order to open in the US and offer CFTC-regulated contracts, Polymarket paid $112 million for a little-known derivatives exchange, QCX, which was in the process of gaining regulatory approval.

Marketing Deals

Many of the recent deals are partnerships that will get the big prediction markets exchanges in front of a broader audience.

Kalshi and Polymarket both reached agreements to offer their contracts through PrizePicks, a fantasy sports app. And Polymarket is collaborating with the mixed martial arts company Ultimate Fighting Championship, to display a scoreboard with fan predictions during broadcasts. At the industry conference this week, Mansour said he expects to announce more sports deals soon, as well as “very large news network partnerships,” though he declined to provide details.

Ultimate Fighting Championship President Dana White, left, and Coplan on the floor of the New York Stock Exchange on Nov. 13.Photographer: Michael Nagle/Bloomberg

It is still possible that the surge will hit a legal wall. A federal judge in Nevada recently expressed skepticism about the legality of Kalshi’s sports contracts and academics have flagged examples of “artificial trading” on Polymarket.

When Cboe Global Markets Inc. announced its own prediction markets product, it said it would steer clear of sports.

“We can jump on any trend or fad, and I suppose we could make a lot of money, but that’s not really what we’re interested in doing,” Cboe CEO Craig Donohue said in an interview.

The sports leagues have approached all this with caution, especially after the Department of Justice announced the latest sports gambling indictments. But while the NHL became the first major US sports league to publicly announce a deal with both Kalshi and Polymarket, other leagues have held conversations with the exchanges to determine how they can cooperate, according to people familiar with the matter.

This month, to mark the UFC tie-up, Coplan joined Sprecher on the floor of the New York Stock Exchange to ring the opening bell — the crypto founder in a crewneck, the exchange chief in a suit.

Source: https://www.bloomberg.com/news/articles/2025-11-20/kalshi-and-polymarket-battle-gambling-companies-in-prediction-market-frenzy

Polymarket has begun live testing its US exchange by quietly opening up to some users and matching trades ahead of its planned relaunch in the American betting market.

The prediction platform says the exchange is fully functional, with select users placing bets on real contracts, as it moves to complete the final steps needed to open up.

“The US Exchange is actually live and operational and people are being onboarded,” founder Shayne Coplan said at Cantor Fitzgerald’s Crypto & AI Infrastructure Conference in Miami. “It’s effectively in a beta test.”

Bloomberg reported last month that Polymarket would be launching in the US in November in a limited roll out.

Read More: Polymarket Plans US Return Within Weeks With Sports Focus

Polymarket’s return to the US comes after the company moved offshore and paid a $1.4 million penalty in 2022 to settle allegations from the Commodity Futures Trading Commission that it ran afoul of regulations.

After surging to prominence during last year’s presidential election, the company has joined the rush to capture a resurgent interest in wagering on real-world events that has upended the US gambling industry. Its closest rival, Kalshi Inc., has been open to US customers for years. And on Wednesday, FanDuel, the US online gambling division of Flutter Entertainment Plc said it would launch its own prediction market product in December.

Polymarket has been looking to raise money at a valuation between $12 billion and $15 billion since announcing an investment of as much as $2 billion from Intercontinental Exchange Inc.

After the Justice Department and the CFTC dropped investigations into the crypto-betting platform earlier this year, Polymarket acquired QCX, a firm that has CFTC approval to operate a derivatives exchange and clearinghouse.

“It’s the fastest anyone has ever gotten to market,” Coplan said. “Definitely a difficult task, but our team has been incredible and made that happen.”

The move will position Polymarket to challenge established sports gambling companies. The company has already established a partnership with the National Hockey League and announced on Thursday a multi-year partnership with TKO Group Holdings Inc. that has made it the official prediction market partner of the Ultimate Fighting Championship and Zuffa Boxing.

“By partnering with Shayne and his team at Polymarket, we’re unlocking a new dimension of fan engagement,” Ari Emanuel, CEO and executive chair of TKO, said in a statement. “Integrating Polymarket with the UFC and Zuffa Boxing live experience will help fans interact with these events in real time, transforming passive viewership into active participation.”

In conventional betting, users trade against the house, which sets odds, limits liquidity, and bans profitable players. Coplan argued the model is structurally flawed compared with Polymarket’s model, which allows users to set prices and back either side of an outcome – a design it says is more like an exchange than a casino.

“I don’t think anyone would argue that the sports book model is the optimal model,” Coplan said. “There’s a monopoly on pricing. You trade against the house every time and they can set whatever prices they want and to make matters worse, if you make any money, they can ban you.’

Source: https://www.bloomberg.com/news/articles/2025-11-12/polymarket-reopens-in-us-in-beta-mode-as-prediction-markets-grow

Prediction markets just got a fresh sell-side stamp of legitimacy. In a new report, Bernstein calls them a viable asset class — arguing that what once looked like novelty bets are now being built into the foundations of mainstream finance, backed by real capital, real users and regulatory approval.

The report pushes back on skepticism that prediction markets are too niche to scale. In the US, Bernstein argues, the landscape looks different: regulation is loosening, and platforms are moving closer to the mainstream through major partnerships and retail integrations.

Robinhood Markets Inc., for instance, clocked around $2.3 billion in prediction-markets volume for the third quarter and $2.5 billion in in October alone, roughly equivalent to $300 million in annual revenue run rate for the online brokerage, according to the analysts. Meanwhile, Coinbase Global Inc. has announced plans to launch prediction markets as part of its “Everything Exchange” vision, encompassing crypto, tokenized equities, stablecoins and prediction markets. Ahead, the Bernstein analysts expect the largest cryptocurrency exchange in the US to announce prediction markets as a key product by the end of the year.

Bernstein also highlights Kalshi and Polymarket as central players in the shift, each helping move prediction markets from the margins into more regulated and accessible territory.

“By letting markets decide probabilities for key events, more mainstream investors can factor these information signals in their portfolios,” wrote Bernstein analysts including Gautam Chhugani. “Increasing political polarity in media and the growing AI slop in content has further blurred signal from noise.”

The analysts see prediction markets emerging as a potential growth driver for Robinhood and Coinbase, citing their large active-trader bases and deep platform liquidity. Bernstein rates both stocks outperform with price targets of $160 for Robinhood and $510 for Coinbase — implying upside of roughly 24% and 70%, respectively, from Thursday’s prices.

Other firms are also building out their prediction-market offerings. Interactive Brokers Group Inc. launched its own prediction market, ForecastEx, in November 2024 thanks to the “enormous” growth potential of the space. Even Donald Trump’s social-media company is pushing into the area, with plans to launch Truth Predict “in the near future.”

Traders are already betting on market events including inflation prints and Federal Reserve rate cuts, using simple contracts that let them trade on clear yes-or-no outcomes. But it’s not just access that’s shifting — Bernstein argues the market forces are, too. These aren’t fringe bets anymore; they’re fast becoming financial infrastructure, tradable signals that could sit alongside options or ETFs as ways to express macro views.

To be sure, volumes remain modest and the vast majority of bets tend to be sports-related. The industry is nascent and some of its key players have histories with legal and regulatory issues.

But while liquidity remains thin and political contracts are still a regulatory minefield, the core infrastructure is now in place, according to Bernstein, as the total addressable market beyond state-regulated betting platforms continues to expand. At the same time, the Trump administration’s digital-asset push is helping crypto markets supply deep global liquidity to the platforms.

Source: https://www.bloomberg.com/news/articles/2025-11-06/bernstein-sees-prediction-markets-entering-mainstream-finance

The volume of activity on Polymarket, one of the most popular prediction markets, has been significantly inflated by so-called wash trading in which users rapidly buy and sell the same contracts, according to a new study by Columbia University researchers.

The “artificial trading,” as the authors call it, varied over time but accounted for an average of 25% of all buying and selling on Polymarket over the past three years, the researchers concluded.

The paper, which has not undergone peer review, was posted Thursday on the open-access research platform SSRN. A representative for Polymarket said the company didn’t have an immediate comment and was reviewing the study.

The authors do not suggest that Polymarket itself was responsible for the wash trading, but they point to elements of the exchange’s crypto-based structure that make it possible.

The findings land as market participants and investors are closely watching the rising trading activity on Polymarket and its closest competitors, which allow customers to bet on the outcome of everything from sports games to elections.

Advocates promote these markets as an efficient, crowd-sourced barometer of the truth, with odds derived from the traders betting on different outcomes. If some of that volume is “fictitious,” the study says, it could alter the understanding Polymarket’s relative strength in the industry and also undermine the notion that prediction markets reflect the “wisdom of a larger crowd.”

“I’m hopeful that Polymarket will welcome the analysis in our paper,” Yash Kanoria, a professor at Columbia University’s business school, and one of the paper’s four co-authors, said in an email. “Wash trading doesn’t add liquidity or information to the market, so it would seem valuable to distinguish authentic from inauthentic volume.”

Kanoria wrote the paper with another business school professor, Hongyao Ma, as well as Rajiv Sethi, a professor of economics at Barnard College at Columbia and Allen Sirolly a doctoral student at the business school.

The authors emphasize that their attempts to identify wash trading are not definitive and amount to estimates. But their findings coincide with a heated race to identify and invest in the most successful prediction market platforms. Polymarket recently announced an investment of as much as $2 billion investment from Intercontinental Exchange Inc.

Wash trading refers to the practice of deceptively entering trades without shouldering any real market risk. The same trader or group of traders typically trade among related accounts. The practice can give the appearance of generating real volume and may impact pricing, but it generally doesn’t reflect real market sentiment. US regulators and exchanges typically view wash trades as a form of market manipulation.

The Columbia researchers said they were able to create algorithms to analyze Polymarket activity because the trading takes place on the publicly visible Polygon blockchain ledger.

The researchers flagged 14% of the platform’s 1.26 million wallets as having activity consistent with wash trading. Those wallets frequently transacted with each other, but seldom with other market participants, the researchers found.

While wash trading may have accounted for around 60% of all Polymarket trading last December, it subsided to around 5% in May of this year before rising again to about 20% in early October, according to the study.

Polymarket, which operates around the globe, has been the top prediction market for most of the past year, according to previous industry analysis. But its chief rival, Kalshi Inc. has attracted more trading in recent weeks, in large part due to the rising popularity of sports gambling on the exchange.

Kalshi does not operate on a blockchain so its trading data is not freely available to researchers.

Polymarket has been officially closed to US customers since a $1.4 million settlement in 2022 with the Commodity Futures Trading Commission for operating an unregistered exchange.

In July, the CFTC and the US Department of Justice closed parallel investigations into whether Polymarket continued to allow US traders despite the settlement. The company is planning to return to the US in the near future after acquiring a CFTC-regulated exchange, QCX.

The authors of the new study suggest that the company’s customers may have independently engaged in wash trading in order to improve their chances of gaining access to a proprietary digital token that the company has said it may release.

Crypto companies often distribute their new tokens through “airdrops” that reward the most frequent users. Polymarket’s founder, Shayne Coplan, has hinted at the possibility of launching a Polymarket token as recently as Oct. 8 in a social media post.

Sirolly, the doctoral student, said in an email that “peaks in organic trading and authentic volume are linked to news about the referenced events, but peaks in wash trading are more likely to be linked to rumors about token issue.”

Several aspects of Polymarket’s operations open the door to wash trading, according to the authors. The exchange has not charged transaction fees, allowing traders to cheaply move in and out of positions. The decentralized exchange also allows users to register their own blockchain-based accounts and transact with a crypto-based stablecoin, which makes it possible for traders to create and control multiple pseudonymous wallets.

On Polymarket, the fictitious trading varied by market category, accounting for 45% of all sports-related trading and 17% of the activity tied to election outcomes, the researchers found.

“The potential for large-scale wash trading means that volume may be unreliable as a metric of authentic platform activity, especially in cryptocurrency-based exchanges which may not have proper safeguards,” the authors conclude.

Wash trading has been a recurring scourge of the crypto industry. Back in 2022, a study showed that wash trading may have accounted for 70% of the volume on unregulated crypto exchanges, significantly altering the public rankings of the largest exchanges.

Source: https://news.bloomberglaw.com/crypto/polymarket-volume-inflated-by-artificial-activity-study-finds

Gambling’s reach is extending deeper into the investment ecosystem as Google strikes a deal to pipe prediction market data from Kalshi Inc. and Polymarket into its finance platform.

In the partnership announced Thursday, Google Finance said it will offer up the changing odds from the prediction market exchanges when users ask for information about future events. Financial terms of the deal with the Alphabet Inc. unit weren’t disclosed.

Kalshi and Polymarket are getting the valuable imprimatur of Google as they seek to legitimize a product that has been derided, in some circles, as nothing more than gambling.

The exchanges have experienced record volumes, due in large part to the popularity of their sports betting products, which offer a federally regulated way to wager on the outcome of sports events of all sorts, despite significant legal pushback from state gaming regulators.

But the companies have been eager to present the trading on their exchanges as a better way to understand the probabilities around a wide array of global issues — from economic data to weather events.

Kalshi and Polymarket both hosted significant trading around the recent US elections, and the odds on the exchanges were cited by many news organizations, in part because they were updated in real time, unlike the more irregular results of polls.

Google said Thursday that the deal with allow its users to “harness the wisdom of the crowds.” As an example, it said that a user asking about future GDP growth will be offered the odds reflected on the exchanges.

Representatives for Kalshi and Polymarket declined to comment.

The integration marks another step in the merging of speculative and informational markets. Prediction data — once confined to niche crypto platforms — has increasingly been used by traders and analysts as an alternative signal for economic or political risk, even though volumes and liquidity have been patchy.

For Google, the move fits into a broader effort to enrich search results with probabilistic and real-time data, as artificial intelligence-powered tools offer new ways to forecast trends.

Source: https://www.bloomberg.com/news/articles/2025-11-06/google-to-offer-kalshi-and-polymarket-data-on-finance-searches

When Coinbase Global Inc.’s quarterly earnings call wrapped up Thursday, its chief executive, Brian Armstrong, didn’t finish with profit guidance or statements of confidence. He closed it out with a list: “Bitcoin, Ethereum, blockchain, staking and Web3.”

Those weren’t random buzzwords. They were part of an $84,000 betting market.

Across prediction market platforms Kalshi and Polymarket, users had wagered on which words would be spoken during the call — part of a niche category known as mention markets, where the outcome isn’t tied to earnings, price moves or sports games, but to what people say in some public forum. With the final analyst question complete, several terms listed in contracts were still unsaid. Armstrong ticked them off one by one.

“I was a little distracted because I was tracking the prediction market about what Coinbase will say on their next earnings call,” he said in his parting remarks. “I just want to add here the words Bitcoin, Ethereum, blockchain, staking, and Web3 — to make sure we get those in before the end of the call.”

The exchange’s CEO had just moved a market — even if only a small one.

Mention markets are one of the more curious byproducts of the broader prediction market boom, but also one of the more controversial. Platforms like Kalshi, which is regulated by the Commodity Futures Trading Commission, and Polymarket, which is in the process of returning to the US market, let users wager on the outcomes of real-world events. That can mean elections, policy decisions, or sports — but also, increasingly, corporate rituals and even common jargon.

In total, about $84,000 had been bet on whether a Coinbase executive would say certain words — including “stablecoin,” “institution,” and “margin,” according to data from the companies’ websites. With several terms still unsaid by the final minutes, Armstrong’s insertions made those contracts pay out. Traders watching the markets saw the odds shift in real time.

After the call, Armstrong said on social media that he decided to do it spontaneously after a staff member put a link to the betting pool in Coinbase’s internal chat.

“lol this was fun,” he posted on X.

But it wasn’t just fun. It showed, in blunt fashion, how easily many prediction markets — supposedly tools for collective intelligence — can be steered by the very people they’re meant to observe.

A Coinbase spokesperson said Armstrong’s remarks were “made in a lighthearted, offhand way, referencing online discussion around the earnings call.” The company’s internal controls prohibit employees from participating in prediction markets or any related activity involving the company, the person added.

Kalshi and Polymarket declined to comment.

Under the CFTC’s core guidelines, regulated platforms aren’t supposed to list contracts that are “readily susceptible to manipulation.” Mention markets may now test the limits of that definition, though rules surrounding this new era of prediction markets are still evolving.

“I’m hopeful that we see additional guidance from the CFTC and maybe a comprehensive regulatory framework that addresses these kinds of issues as they come up,” said Andrew Kim, partner at Goodwin Procter LLP. “A core question that needs to be answered first, is there something to regulate here? Or is this a flash in the pan feature that sounds nice in theory but doesn’t work in execution and you move on to the next thing.”

For years, advocates of prediction markets have argued that they represent a cleaner, more democratic way to forecast outcomes. By letting users bet on future events, the thinking goes, the markets aggregate real information better than polls or pundits can. Yet mention markets, by design, are unusually easy to influence. They rely on public statements by a small number of people who can change the result simply by speaking.

Coinbase itself has jumped onto the prediction market bandwagon. It holds stakes in Kalshi and Polymarket, and Armstrong said during the same call that the company plans to expand into event contracts as part of its broader effort to become an “Everything Exchange” for financial products.

The online reaction to Armstrong’s remarks mixed humor and unease. The official Polymarket account on X called the move “diabolical work.”

“The way that this all blows up is if the CFTC says this is getting too ridiculous,” Chris Dierkes, head of trading at sports-focused prediction markets platform Novig, said in a video posted on X on Thursday.

Mention markets remain a niche inside a niche. Last week they represented 0.4% of activity on Kalshi, where sports made up 91%, according to publicly available data collated by the user datadashboards on Dune Analytics.

Yet they punch above their weight in quirks and disputes. Traders have sparred over what counts as a valid mention: Does an extended clip qualify? Do words inside compound words count? Kalshi’s rules say “immigrants” will satisfy a bet on “immigrant,” but “immigration” won’t. A contract for “ICE” could pay out on “ice water.”

All told, Armstrong’s words, said offhandedly and half in jest, turned a quarterly earnings ritual into a kind of mirror. What it reflected wasn’t collective wisdom, but how easily the crowd can be gamed.

Source: https://www.bloomberg.com/news/articles/2025-10-31/coinbase-ceo-stunt-exposes-vulnerability-in-prediction-markets