Lead brief
A new study by the Coalition for Prediction Markets reveals that US-based users traded approximately $34 billion on illegal offshore prediction exchanges, highlighting regulatory gaps and growing demand for event-based wagering in the United States.
Coverage frame
This piece sits inside the wider 31Casino news desk, where single developments are read against regulation, market structure, and reader relevance.
Primary source base
- ▸US users reportedly traded about $34 billion on illegal offshore prediction markets.
- ▸The estimate comes from a Coalition for Prediction Markets report, with analysis from Rutgers University.
- ▸US law prohibits most online event-based betting, leaving a regulatory void.
- ▸The findings reignite debate over the need for clear regulation of prediction markets in the US.
What Happened
A study conducted by the Coalition for Prediction Markets (CPM), representing regulated US prediction market operators, in collaboration with Rutgers University, has found that up to $34 billion in event contract trading volume was generated by US users on illegal offshore prediction market exchanges. The research, released in May 2024, provides the most comprehensive estimate to date of US engagement with unregulated yes/no event-based wagering and highlights the lack of domestic, regulated options. The figure encompasses a range of event contract types, including political, economic, and entertainment outcomes, commonly hosted on offshore platforms that openly cater to Americans despite federal and state prohibitions.
Why It Matters
The CPM study draws sharp attention to the vast scale and persistence of US participation in unauthorized prediction markets. Despite existing legal barriers, millions of Americans are actively accessing offshore sites in order to wager on real-world events—a market that remains almost entirely banned or heavily restricted across the US, with only a handful of regulated exchanges like Kalshi and the educational-focused PredictIt operating under narrow legal interpretations or no-action letters.
$34 billion — the estimated trading volume by US users on offshore prediction exchanges in recent years, underscoring the scale of untaxed, unregulated activity.
This enormous figure has major implications for policymakers, the regulated gaming sector, and consumer protection advocates. First, the number suggests overwhelming consumer demand for event-based betting products, which is being met almost exclusively by non-compliant operators operating beyond the reach of US enforcement. Second, the funds flowing offshore represent not just lost tax revenue but also significant risks to US consumers, including a lack of recourse for disputes, opaque odds, and potential exposure to fraud or illicit financial flows.
Public debate over prediction markets has intensified as high-profile political elections, economic trends, and even technological innovations become the subject of speculative trading. The absence of a clear, consistent regulatory framework has created an environment where sophisticated offshore operators can thrive, often attracting users through features and markets unavailable domestically.
Industry Context
The study’s findings arrive at a critical moment for the US online gambling landscape. The proliferation of legal sports betting and online casino gaming across dozens of states has not been matched by similar progress for prediction markets, which occupy a legal gray area between traditional gambling and financial products. Although the Commodity Futures Trading Commission (CFTC) has occasionally approved “event contracts” under restricted conditions, wider approval has proven elusive and contentious.
Advocates for regulation argue that properly overseen prediction markets could drive innovation in the financial, technology, and gaming sectors while also channeling consumer interest into transparent, tax-contributing platforms. To date, however, the ongoing legal uncertainty and patchwork enforcement have stifled the emergence of domestic competitors, ceding ground to well-resourced offshore entities.
Regulatory Background
US federal law, primarily the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, largely prohibits interstate online gambling except where states have legislated exceptions, as in the case of sports betting. Prediction markets have faced additional scrutiny, with ambiguity over whether they constitute gambling, financial derivatives, or both. High-profile legal wrangling—such as PredictIt's ongoing dispute with the CFTC—has left regulated operators with limited product offerings and uncertain legal standing.
Meanwhile, offshore operators based in jurisdictions like the Caribbean or Europe continue to accept US customers with little resistance, advertising directly to Americans and processing sizable volumes in event-based contracts. This parallel market undermines both regulatory objectives and consumer protection efforts.
What Happens Next
Given the scale revealed by the CPM study, regulators and lawmakers face increased pressure to clarify the legal status of prediction markets in the US. Calls for new federal or state-level legislation, or expanded CFTC guidance, are likely to continue as policymakers weigh the risks and potential societal benefits. The trajectory of competing legislative proposals and the outcome of ongoing court cases will determine whether the US can transition prediction market activity from the current offshore “gray market” to a well-regulated, domestic model.
Sources
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