Four years ago, US regulators banned Americans from Polymarket’s offshore exchange. A new study says they traded there anyway — as much as $34 billion across banned offshore prediction markets. The federal government’s freshly minted rulebook still can’t touch that activity. But the headline number deserves a closer look. It is the top of a wide estimate. It also counts trading volume, not money lost. Finally, a group of Polymarket’s regulated competitors paid for the research.
KEY FACTS AT A GLANCE
- What it found: an estimated $11B–$34B in US offshore-market trading (central ~$21.2B), over the year ending April 2026.
- The catch: it measures trading volume, not deposits or losses. And it is a modeled estimate, not a measured total.
- Who’s behind it: the Coalition for Prediction Markets, a trade group of regulated operators (Kalshi, Coinbase, Crypto.com) that excludes Polymarket.
- The platform: nearly two-thirds of the offshore volume traces to Polymarket.
- Legal status: offshore Polymarket has been off-limits to US users since 2022. A regulated Polymarket US launched in December 2025.
- The gap: the CFTC’s June 10, 2026 rulebook governs domestic platforms but cannot reach offshore venues.
Banned but booming: what the study claims
The study came from the Coalition for Prediction Markets (CPM) and Crane & Zeng Consulting. Rutgers professor Harry Crane led the work, and he also sits on the CFTC’s Innovation Advisory Committee. By his team’s estimate, US-based traders moved $11 billion to $34 billion through offshore prediction markets. The window was the trailing 12 months ending April 2026, and the central estimate sits near $21.2 billion. Notably, nearly two-thirds of that activity ran through Polymarket. The rest spread across smaller venues such as Opinion, Predict, Limitless, and Myriad.
How did they get there? Polymarket technically bars US users, so the researchers estimated their share. They put it at roughly 30% of Polymarket’s $55.6 billion in trailing-12-month volume — between $10.6 billion and $26.7 billion. The same brief argues offshore platforms still handle 12.5% to 31.5% of all US prediction-market volume. The boom has also pulled DraftKings, FanDuel, and Coinbase into the space. We covered that scramble in our look at the prediction market wars.
What the $34 billion number actually measures
Before anyone repeats the figure as fact, it pays to know what it does and doesn’t say. First, $34 billion is the ceiling of an $11–$34 billion range. The study’s own central estimate is closer to $21 billion, and the lower bound matters just as much. Second, the number counts trading volume — the notional value of contracts bought and sold. It is not the amount Americans deposited, lost, or handed operators in revenue. A single dollar can change hands many times, which inflates volume well beyond the cash at stake.
Third, it is a model, not a meter reading. Offshore platforms don’t disclose user nationality, and the platform technically blocks US traders. So the researchers triangulated the American share from indirect signals — US-centric markets and trading during US business hours. Independent on-chain trackers measure different things, so no outside dataset confirms the exact figures. The timing is fuzzy too. Most outlets cite a window of roughly April 2025 to May 2026, while the study’s tightest framing is the trailing 12 months ending April 2026. None of that makes the number wrong. It does make it an estimate to attribute, not a fact to bank on.
Who paid for the study — and why it matters
The Coalition for Prediction Markets is not a neutral observer. It is an advocacy group, and its members run regulated US platforms — Kalshi, Coinbase, and Crypto.com among them. As a result, those members benefit when offshore venues look like a vast, unsupervised market. Tellingly, the coalition leaves out Polymarket, the very platform behind most of the volume it cites. So the headline doubles as a lobbying pitch for federal regulation. The coalition’s president, former congressman Sean Patrick Maloney, makes that case directly.
“The debate is not about whether prediction markets should exist, but whether they should be regulated domestically under federal oversight or continue to migrate to offshore platforms that host controversial markets involving death and war.”
— Sean Patrick Maloney, President, Coalition for Prediction Markets
None of this makes the study wrong. Its core claim is plausible: plenty of American money still flows to banned offshore markets, and platform-level data points the same way. But readers should treat the precise dollar figures as an interested party’s estimate, not an independent audit. Instead, weigh the conservative lower bound alongside the attention-grabbing high end.
Why Americans are ‘banned’ — and how they still get in
The ban dates to January 2022. The CFTC charged Polymarket’s operator, Blockratize, with running an unregistered event-contract market. Polymarket paid a $1.4 million penalty and agreed to block US traders. That settlement pushed its main exchange offshore. The agency was blunt about the principle at stake.
“All derivatives markets must operate within the bounds of the law regardless of the technology used, and particularly including those in the so-called decentralized finance or ‘DeFi’ space.”
— Vincent McGonagle, CFTC Acting Director of Enforcement (2022)
So how does a banned platform still pull billions from Americans? Mostly through VPNs that hide a trader’s location and slip past geo-blocks. Polymarket has pushed back. As a result, it now blocks known VPN address ranges and runs wallet-level analysis to flag suspicious accounts. The coalition leaned into exactly that behavior when it promoted the study.
“Americans are using VPNs to access unregulated, offshore prediction market platforms that offer contracts on death and war.”
— Coalition for Prediction Markets
Legal alternatives now exist that didn’t a year ago. Polymarket bought the CFTC-licensed exchange QCEX for about $112 million. It then won an amended CFTC designation and launched a regulated “Polymarket US” in December 2025, with identity checks and approved brokers. We unpacked that turnaround in Polymarket’s US relaunch explained. Kalshi, meanwhile, stayed CFTC-regulated throughout and operates in all 50 states. The catch is simple: the still-running offshore exchange and the new regulated one are different products.
A NOTE ON VPN WORKAROUNDS
Using a VPN to reach a platform that blocks US users breaks its terms of service. The fallout can include a suspended account, frozen or forfeited funds, and no federal recourse if something goes wrong. You may also face exposure under your state’s gambling laws. Run into trouble with a banned offshore site? Our guide on offshore gambling recourse can help.
The regulatory gap: a rulebook that can’t reach offshore
The study’s timing was no accident. On June 10, 2026, the CFTC released its first formal prediction-market rule proposal. The 267-page framework would allow most mainstream sports contracts — final scores, win-loss, season-long performance. It would bar contracts on war, terrorism, assassination, and other activity it deems against the public interest. The plan also adds a 90-day, contract-by-contract review. Chairman Mike Selig framed it as a balancing act.
“The CFTC will protect the integrity of our regulated markets without standing in the way of responsible innovation.”
— Mike Selig, Chairman, CFTC
Here is the catch the study aims to spotlight. The rulebook governs domestic platforms like Kalshi and Polymarket US. It offers no way to reach the offshore venues where, the coalition says, billions in American volume still sit. Kalshi co-founder Luana Lopes Lara made the same point. She argued that curbing regulated exchanges, without touching offshore platforms, would simply push activity outside the CFTC’s reach.
Meanwhile, that federal push is colliding with the states. Several states issued cease-and-desist orders, and Arizona filed criminal charges against Kalshi. In April 2026, the CFTC and the Justice Department sued Illinois, Connecticut, and Arizona to block enforcement. They argue federal commodities law preempts state gambling rules. Days later, the Third Circuit sided with Kalshi against New Jersey, the first appeals-court ruling on the question. We have tracked the wider feds-versus-states battle as it escalates.
Prediction markets are following the offshore-sportsbook playbook
Anyone who watched US sports betting mature will recognize the pattern. For example, regulated American sportsbooks took an estimated $168 billion in handle in 2025. Yet an estimated $300–330 billion still flowed through offshore books, per figures cited in the coalition’s study. Similarly, prediction markets show the same split, just earlier. The study pegs regulated platforms near $74 billion in trailing-12-month volume, against an offshore ecosystem around $93.9 billion. Sportsbooks learned the lesson the hard way: bans rarely kill demand. They just relocate it.
The coalition argues the gap only widens from here. It projects US offshore activity could reach roughly $133 billion a year by 2030. That figure assumes today’s market shares hold steady, and it comes from the same interested party.
“The offshore and unregulated prediction market industry could grow to $133 billion by 2030 — surpassing the combined size of America’s video game and recorded music industries.”
— Sean Patrick Maloney, President, Coalition for Prediction Markets
So prediction markets may be the next regulated-versus-offshore battleground. If so, the usual betting tools still apply. For instance, you can price the house’s cut with our vig calculator, or strip it out for true odds with the no-vig calculator. We also dug into how these venues make money in Polymarket’s fees and the sportsbook-ification of prediction markets.
FAQs
Not exactly. The $34 billion is the top of an estimated $11 billion to $34 billion range of trading volume, not money lost or deposited. One study produced it, commissioned by the Coalition for Prediction Markets and led by Rutgers professor Harry Crane. It covers roughly the 12 months ending April 2026. The central estimate sits closer to $21 billion, and it is modeled, not measured.
It measures estimated trading volume by US-based users across offshore prediction markets. Polymarket accounts for nearly two-thirds of it. Volume is the notional value of contracts traded, which differs from what users deposited or won and lost. Because a single dollar can be traded repeatedly, volume can dwarf the money actually at risk.
There are now two Polymarkets. The original offshore exchange has been geo-blocked to US users since a 2022 CFTC settlement, which carried a $1.4 million penalty. A separate, CFTC-regulated Polymarket US launched in December 2025, after the company bought the licensed exchange QCEX for about $112 million. It requires full identity verification. Some states still restrict access.
Yes. Kalshi is a CFTC-regulated exchange that can serve residents in all 50 states. Several states have still issued cease-and-desist orders, and courts are still weighing the federal-versus-state question over sports contracts. In April 2026, the Third Circuit backed federal preemption in Kalshi’s favor against New Jersey.
Mostly through VPNs that mask their location and bypass IP-based geo-blocks. Polymarket has tightened enforcement, blocking known VPN ranges and running wallet-level analysis. Using a VPN on a platform that bars US users breaks its terms. It can trigger account suspension, frozen or forfeited funds, lost federal recourse, and state gambling-law exposure.
The Coalition for Prediction Markets commissioned it, an industry group of regulated operators including Kalshi, Coinbase, and Crypto.com. It notably excludes Polymarket. The study backs the coalition’s push for federal regulation, so its framing serves a lobbying interest. The core claim is plausible. But the precise dollar figures are an interested party’s estimate within a wide range, so the lower bound deserves equal weight.
On June 10, 2026, the CFTC proposed its first formal prediction-market rules. The 267-page framework would permit most mainstream sports contracts while barring contracts on war, terrorism, and assassination. It adds a 90-day, contract-by-contract review. Critics note the rules govern domestic platforms like Kalshi and Polymarket US, but cannot reach offshore venues. That gap is exactly what the study set out to spotlight.
KEY TAKEAWAYS
- Up to $34B, but read the fine print — the figure tops an $11–$34B estimate of trading volume, not money lost. It is modeled, not measured.
- Consider the source — the Coalition for Prediction Markets funded it. That group of regulated operators excludes Polymarket and wants federal oversight.
- Polymarket is two products now — the banned offshore exchange still runs. A regulated Polymarket US launched in December 2025.
- The rulebook has a blind spot — the CFTC’s June 10 framework covers domestic platforms but can’t reach offshore venues.
- It rhymes with sports betting — regulated channels are growing fast, yet offshore volume still leads, as it did with early US sportsbooks.
Sources
- Analysis of U.S. User Activity on Offshore Prediction Markets — Harry Crane (Crane & Zeng Consulting), commissioned by the Coalition for Prediction Markets
- CFTC Orders Event-Based Binary Options Markets Operator to Pay $1.4 Million Penalty — U.S. Commodity Futures Trading Commission
- Prediction Markets at a Crossroads: Preemption, Enforcement and Rulemaking — Norton Rose Fulbright
- Polymarket Acquires CFTC-Licensed Exchange and Clearinghouse QCEX for $112 Million — Polymarket (PR Newswire)
- Prediction Markets Get First U.S. Rule Proposal as CFTC Proposes Contract Reviews — CoinDesk
- Americans Traded Up to $34 Billion on Offshore Prediction Markets: Study — Decrypt
- Study: Up to $34B Traded on Offshore Prediction Markets — Casino.org
- The CFTC’s New Rulebook Doesn’t Reach a $34 Billion Offshore Prediction Market — Finance Magnates
