Prediction markets, where people bet on the outcome of future events, are experiencing a boom. However, this growth is also bringing them under closer watch from governments around the world. This past week, places like the Netherlands, New Zealand, and several states in the U.S. have taken action against these platforms, with Polymarket and Kalshi being the main targets.
In Nevada, the state has officially sued Kalshi. This is part of a bigger effort to stop the company from operating there. Nevada has already managed to get Polymarket and Crypto.com to stop their prediction market activities in the state. However, Kalshi has been resistant to leaving any of the states where it operates. It’s worth noting that even big names like FanDuel and DraftKings chose to give up their sports betting licenses in Nevada so they could launch their own prediction market platforms.
The disagreement between Nevada and Kalshi has been going on for a while, ever since the Nevada Gaming Control Board sent Kalshi an order to stop its operations last year. This week saw more back-and-forth in the legal proceedings, but there’s still no final decision. A lawyer who specializes in gaming, Andrew Kim, described the situation as becoming “extraordinarily messy” from a legal and jurisdictional point of view.
Both Kalshi and Polymarket have significantly increased the number of events people can bet on over the last year. This now includes major esports competitions.
Polymarket Bypasses Blocks in Australia and China
Even in places where these platforms are officially banned, users often find ways to access them. Instead of strictly enforcing these bans, Polymarket has been accused of encouraging people in restricted areas to use its app. In Australia, which is listed as a restricted territory, the country’s gambling regulator noted that the company was using social media personalities to attract Australians.
The company has also been focusing on users in China. Justin Yang, who leads Polymarket’s strategy for entering the Chinese market, mentioned he is managing a team of Mandarin speakers to boost the platform’s presence there. This is happening even though China has blocked Polymarket as part of its strict internet censorship system, known as the Great Firewall.
Yang stated that his team would help Chinese traders, create a Chinese version of the website, and keep an eye on search trends in China to add betting topics that are more relevant to Chinese culture. One user, who appears to be from China and uses the social media platform X, has successfully used Polymarket to make over $100,000 in bets on esports events in the last month.
The platform has also created betting markets related to the Lunar New Year, which is the most important holiday in China. While governments and states are taking stronger legal action against Kalshi and Polymarket, the two companies do not seem to be slowing down their operations. As lawyer Andrew Kim pointed out on X, the outcome of all these legal challenges is still uncertain. Currently, there are no prediction markets available to bet on the future of prediction markets themselves.
