Polymarket, which gained recognition as a leading prediction platform after its 2020 debut, resumed US operations in late 2025 following a period of suspension. The platform had restricted access to American users in 2022 after federal charges, returning under a model sanctioned by the Commodity Futures Trading Commission (CFTC). While federal approval allows nationwide participation, it has triggered new legal challenges at both state and international levels.
The company faced federal scrutiny for offering unregistered event-based contracts and violating cryptocurrency regulations. This led to a $1.4 million settlement, restricted US access, and internal restructuring. During the hiatus, Polymarket expanded internationally and attracted attention for market movements during the Trump vs. Harris election cycle, with media outlets reporting on its pricing despite the platform’s absence in the US
A critical development was Polymarket’s $112 million acquisition of QCEX, which granted it access to QCX LLC and QC Clearing LLC. This acquisition provided the infrastructure needed for CFTC licensing and operation as a Designated Contract Market. In September 2025, the CFTC issued a “no-action” letter to QCX, enabling Polymarket to relaunch in the US under a compliant framework, initially via a waitlist system starting in December 2025.
The updated US model eliminates direct cryptocurrency wallet connections. Users must register through the US portal, complete KYC verification, and fund accounts through regulated brokers. The platform also cautions against VPN use, highlighting potential account freezes linked to regulatory requirements. State-specific limitations may apply to sports-related contracts.
State Challenges Continue Despite Federal Green Light
Even with federal authorization, state authorities have taken action against prediction markets. Tennessee, Nevada , Massachusetts, Maryland, New Jersey, New York, and Connecticut have either raised concerns, issued enforcement notices, or initiated legal proceedings over sports- or event-based contracts.
Tennessee’s Sports Wagering Council issued cease-and-desist directives, asserting violations of gaming laws, tax regulations, age controls, and responsible gambling standards. A federal judge has temporarily blocked enforcement while the case advances.
Nevada regulators filed a lawsuit to prevent sports-event contract offerings. In early 2026, Massachusetts courts issued a preliminary injunction against Kalshi over sports contracts, signaling heightened judicial scrutiny of financial-prediction platforms. While the injunction does not directly target Polymarket, it adds to broader regulatory uncertainty.
Global Restrictions and Compliance Pressure
Polymarket has also encountered international limitations. In January 2026, authorities in Portugal and Hungary imposed bans. Portuguese regulators cited a lack of authorization and laws restricting political event betting. Hungary’s ban is temporary, reflecting a wider trend of tighter oversight. France introduced a “view only” mode, allowing market observation but preventing participation.
Concerns have grown over the classification of prediction platforms. A high-profile January trade, where a user earned over $436,000 by predicting Nicolás Maduro’s removal just before US intervention, heightened accusations of insider access. This prompted congressional attention and legislation aimed at preventing federal employees from participating in markets where they hold privileged information. Polymarket’s US compliance team has also increased monitoring, flagging accounts suspected of trading on non-public data.
While federal sentiment toward prediction platforms is becoming more favorable, state-level resistance and international bans create a patchwork of regulatory challenges, underscoring the complex landscape facing prediction markets globally.
Source:
“Polymarket’s US Relaunch Collides With State and Global Hurdles”, casinonewsdaily.com. January 27
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