US Traders Drive $21.2 Billion Offshore in Prediction Markets: What's Next?

US traders are contributing significantly to offshore prediction markets, with an estimated $21.2 billion in annual volume. This figure highlights the substantial role American users play in these markets, despite ongoing regulatory efforts by the Commodity Futures Trading Commission (CFTC) and various congressional discussions around participation limits.

Chronology

The recent study by Crane & Zeng Consulting, commissioned by the Coalition for Prediction Markets, provides an in-depth look at offshore venues like Polymarket and others. According to the study, US-based users account for 25% of the tracked offshore trading volume, which translates to an estimated $21.2 billion out of a total $55.6 billion on platforms such as Polymarket.

Interestingly, Polymarket employs geo-blocking measures to restrict US internet addresses, but users bypass this through virtual private networks (VPNs), which breaches the platform's terms. This tactic has led to approximately 30% of Polymarket's volume being traced back to American users alone.

With the data showing at least 7% of the global trading volume in prediction markets tied to US users, the conservative estimate ranges from $10.6 billion to $34 billion, covering both regulated and offshore activities. These figures emerge amidst discussions about the regulatory frameworks needed to manage the growing interest and volume of American participation in these platforms.

Impact

This substantial US involvement in offshore prediction markets tells us two main things. First, there's a clear demand for these trading platforms that's not fully satisfied by the existing regulated options. Second, this demand comes despite efforts by the CFTC to create a structured environment for such activities within the US market.

Polymarket launched its US-compliant platform in December 2025 under the oversight of the CFTC as a designated contract market (DCM) and derivatives clearing organization (DCO). It initially set up a waitlist, which it removed in May 2026, expanding access to over 40 states. However, state-level challenges persist, as seen with Nevada's preliminary injunction and Minnesota's impending ban, slated for August 2026.

The regulated alternatives, like Kalshi, have seen rapid growth. From 2024 to 2025, regulated venue volumes grew 866%, far surpassing the 179% growth seen offshore. Kalshi's monthly volume alone skyrocketed to $14.81 billion by April 2026, while Polymarket's increased around seven times to $9.01 billion. It's clear there's a significant shift happening, but is it enough to draw traders away from their offshore counterparts?

Outlook

So, what's next for these prediction markets? Analysts predict explosive growth. Bernstein estimated in April 2026 that by 2030, the total market volume could approach $1 trillion, reflecting an 80% compound annual growth rate. Industry revenue could ascend from $0.4 billion in 2025 to a staggering $10.8 billion in 2030.

However, tighter regulations on US-based platforms might inadvertently push even more growth offshore, especially if American traders find the regulatory environment too restrictive. This presents a potential dilemma: can the US regulatory bodies find a balance that retains traders domestically while ensuring market integrity?

There's no simple path forward. The data shows a keen interest from US traders in offshore markets. The question is, will regulatory bodies adapt quickly enough to capture this interest within their oversight, or will offshore platforms continue to thrive outside their reach? The answers will shape the industry's future and the role of the US within it.