The party does not last. In early 2022, the CFTC2, the US derivatives regulator, turns up with a $1.4M fine and a clear message: in substance, you are an illegal casino, so shut up shop in the United States. Polymarket agrees, pays up and promises to block Americans. Problem solved? Not really. Because keeping Americans off the internet is like stopping the British from talking about the weather: they will always find a way.
Coplan’s strategy, “move fast and break things”, betting edition, runs into bureaucratic reality. To win over the regulators, he hires J. Christopher Giancarlo, a former chairman of the CFTC itself. That is the equivalent of hiring a former head of the DEA to smooth things over for your cannabis start-up. Clever, but not enough.
The American system shows its contradictions: PredictIt, a university-run platform, may operate with ridiculous caps of $850 per bet. Polymarket, meanwhile, takes stakes of several million. Guess which one bothers the authorities more? The platform becomes the bad boy of prediction markets, the one everybody uses but nobody dares defend in public.
In 2024, things turn sour. Polymarket has Trump winning while the traditional polls stick with Harris. The $3bn wagered on the election make the platform a political player in spite of itself. A week after the vote, the FBI turns up at Coplan’s home at 6 in the morning. Phone seized, computers taken, a full-blown raid. The DOJ and the CFTC are investigating: Americans are said to have got round the geoblocking. Who could have guessed.
Coplan cries political retribution, and obvious retribution at that. Could the outgoing Biden administration be punishing the platform that predicted its defeat? The affair smells like a settling of scores between the establishment and these new digital oracles that dare to contradict CNN and the New York Times.
The rest of the world joins in. Switzerland blacklists Polymarket. Surprising, for a country that built its fortune on banking secrecy. In France, the ANJ3, the national gambling regulator, declares it illegal. Same verdict in Poland, Singapore and Belgium. Europe, the continent that loves to wax lyrical about innovation but panics the moment a start-up shakes up a state monopoly, forms a united front against this betting 2.0.
The problem is simple: Polymarket claims to fight disinformation by creating financial incentives to tell the truth, yet finds itself banned wherever the truth is inconvenient. Governments love to talk about “free markets” and “transparent information”, right up until a free market reveals transparent information they do not like.
Then comes the twist. Trump is back in the White House in 2025 and suddenly, as if by magic, the DOJ drops the case. The CFTC turns accommodating. Polymarket buys QCEX for $112M, and with it an official licence to operate in the United States. The bad boy goes respectable. Donald Trump Jr. even joins its advisory board through the 1789 Capital fund.
And last week came the apotheosis, when Intercontinental Exchange, the parent company of the New York Stock Exchange, put $2bn into Polymarket, valuing the company at $8bn4. The young founder from Brooklyn becomes a billionaire at 27. Wall Street officially embraces what it was fighting yesterday. Polymarket data will be sold to institutional investors, built into X (formerly Twitter) and broadcast on Stocktwits.
It is the eternal story of American capitalism: first they ignore you, then they fight you, then they buy you. Polymarket has survived phase two. The question now: what becomes of a rebel oracle once the establishment adopts it? Can you still predict the truth when Goldman Sachs owns a slice of your capital?
The regulation of prediction markets reveals an awkward truth: our democracies do not like people betting on their future. They prefer the monopoly of official pollsters, accredited experts and in-house analysts. That a crowd of anonymous punters might predict elections better than Ipsos is what upsets the established order. Polymarket is not just a betting platform; it is a mirror held up to our societies, showing them that information has a price, and that this price is often different from the one they would like to put on it.