The agency's new framework regulates the compliant players and leaves the offshore market untouched. New data shows just how much that costs.
The CFTC released its long-awaited prediction market framework this week, setting out how federally regulated event contract platforms should operate across 267 pages. There is no mention of Polymarket.
.@CFTC Seeks Public Comment on Notice of Proposed Rulemaking Concerning Event Contracts Involving Enumerated Activities: https://t.co/bZk2SVkWuR
— CFTC (@CFTC) June 10, 2026
Meanwhile in an April 30 comment letter, Kalshi co-founder Luana Lopes Lara argued that restricting regulated exchanges without addressing offshore platforms would simply push more activity outside the CFTC’s oversight. State regulators, members of Congress, casino industry lobbyists, and some sports leagues also called for stricter rules.
The new rule proposal makes no mention of the issue, and the CFTC has not indicated any plan to address it separately. Kalshi, operating under CFTC oversight, now faces a new regulatory framework with potential restrictions on certain sports markets. Polymarket, operating offshore, faces none of it.
The Numbers Behind the Blind Spot
A June 2026 research brief from Crane & Zeng Consulting, commissioned by the Coalition for Prediction Markets, puts the first rigorous estimate on what that regulatory gap actually looks like in dollar terms.
As there is no direct way to identify offshore users the researchers triangulated from sports betting composition and hourly trading patterns.
Their central estimate: approximately 30% of Polymarket's trailing twelve-month (TTM) volume of $55.6 billion is attributable to U.S.-based users. That translates to a range of $11–34 billion in annual offshore volume generated by American participants on a platform they are technically not supposed to access.
The broader offshore ecosystem processed an estimated $93.9 billion in TTM volume against $74 billion on CFTC-regulated platforms. Offshore activity still exceeds regulated by a factor of roughly 1.3.
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Tighter Rules on Kalshi, Looser for Everyone Else
The regulatory asymmetry has a practical consequence that runs counter to the CFTC's stated consumer protection goals. From 2024 to 2025, CFTC-regulated prediction market volume grew 866% far outpacing the 179% growth on offshore platforms over the same period. Kalshi's monthly volume rose roughly 22-fold between May 2025 and April 2026.
The data suggests that regulated access, when available and competitive, does pull users away from offshore alternatives. The new framework risks reversing that dynamic.
Additional restrictions on sports markets, age requirements, and product design apply to regulated platforms, and none of them apply offshore, making unregulated venues comparatively more attractive.
The Crane & Zeng report projects that U.S.-attributable offshore volume could reach $133 billion annually by 2030 if current trends hold.
The CFTC's framework gives regulated platforms a clearer rulebook. But it doesn't address the fact that stricter rules on compliant players will push more U.S. volume toward platforms that have no rulebook at all.
