While the U.S. prediction market industry is fighting over which regulatory model should govern it, Plus500 is operating as infrastructure across both sides.
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The broker managed to gain exposure to the sector without becoming a prediction market operator itself. The question is whether this infrastructure-led position gives Plus500 a durable advantage.
The company is not a party to the lawsuits and bears no direct responsibility for their outcome, but its upside still depends on whether prediction markets are allowed to scale under either regulatory model.
Two Competing Regulatory Approaches
At the center of the dispute is a basic question: are prediction markets financial instruments or a form of gambling? U.S. regulators are answering it in different ways and increasingly through the courts.
The conflict pits two competing models against each other: the federally regulated, exchange-based approach backed by the CFTC and platforms like Kalshi, and the state-licensed gaming model that incumbent sportsbooks such as FanDuel are defending.
This month, the situation escalated significantly when the CFTC filed lawsuits against Arizona, Connecticut, and Illinois — states that had previously moved against prediction market platforms. The CFTC is arguing that state-level intervention interferes with federally approved designated contract markets.
Retaliation followed hard on the heels. New York Attorney General Letitia James sued Coinbase and Gemini, accusing them of operating illegal gambling operations through prediction market products. The federal government responded almost immediately, moving against New York to stop state-level enforcement and defend federal authority.
The dispute is spreading. Kalshi is fighting multiple states in court, while Coinbase has preemptively challenged state oversight. These parallel actions are turning individual enforcement cases into a wider jurisdictional conflict between federal and state authorities.
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What Is at Stake
The legal battles have direct financial consequences. Licensed sportsbooks in New York pay around 51% of gross revenues in tax; platforms operating under a derivatives framework do not.
The revenues involved are not trivial. According to estimates, Kalshi generated around $260 million in fees in 2025. Polymarket remains smaller in fee terms but has also grown alongside rising event-driven trading activity.
Consumer protection adds another dimension. Prediction market platforms currently allow participation from age 18, while state gambling laws typically set the minimum at 21, reflecting different assumptions about risk and oversight.
The outcome will determine not just who regulates the category, but how it is built: whether prediction markets are integrated into the federal financial system or pulled into state-controlled gaming frameworks, and where the economics ultimately flow.
Where Plus500 Fits
Plus500 is not a prediction market operator. It sits at the access and infrastructure layer, and gains exposure to the sector through both.
The company offers retail access to Kalshi’s CFTC-regulated event contracts through its Plus500 Futures platform, acting as the broker while clearing trades via its membership in Kalshi Klear. The contracts are listed and resolved on Kalshi, while Plus500 controls the user interface, onboarding, and risk management.
“Plus500’s proprietary technology, suite of clearing memberships and established risk-management infrastructure provide a scalable foundation to support broader participation and growth in prediction markets for B2C customers,” the company said.
At the same time, Plus500 is the designated clearing partner for FanDuel Prediction Markets, the joint venture between FanDuel and CME Group. In that role, it provides execution, clearing, and risk management in the background, with no user-facing presence.
One role is front-facing. The other is invisible to the end user.
“The Group’s established infrastructure, including clearing, technology and risk-management capabilities, also supports future opportunities with additional B2B partners within a robust regulatory framework,” the company added.
These positions reflect a broader shift in strategy. Plus500 built its business on CFD products but has been expanding into exchange-based and infrastructure-driven operations.
Exposure and Risk
The structure places Plus500 across both sides of the regulatory divide — one part of the business tied to a federal derivatives model, another supporting infrastructure linked to a gaming-aligned market model.
This gives the company exposure to the growth of prediction markets without carrying the direct regulatory risk that platform operators face. Whatever model prevails, the infrastructure layer still needs to function.
The model is already contributing to growth, although its exact impact is not disclosed. Plus500’s U.S. business generated about $35 million in quarterly revenue, up 45% year over year, and now accounts for roughly 15% of group revenue and 18% of new customers.
The expansion has been driven by its non-OTC offering, including futures and prediction markets, built on its existing U.S. clearing footprint following the acquisition of Cunningham Commodities.
The risk profile, however, is less obvious. Much of Plus500’s exposure is indirect and tied to its role as an intermediary. The company depends on Kalshi and FanDuel, and its growth is linked to their ability to scale.
More restrictive regulation could limit retail access and reduce volumes across the ecosystem. At the same time, the long-term trajectory of the sector remains uncertain.
What This Means for the Industry
For brokers and B2B providers, the key question is whether this model can be replicated, or whether Plus500 moved early enough to secure a structural advantage — and whether that advantage holds as the regulatory outcome becomes clearer.
