Polymarket launched private share betting markets exclusively through its offshore app, bypassing U.S. regulatory restrictions. The prediction market platform confirmed the new product is unavailable to U.S.-based users, though American residents regularly access the offshore platform via VPNs. The expansion introduces betting on private company shares—entities not required to disclose financial performance or material events—creating a regulatory gray zone. U.S. equity-tied contracts constitute security-based swaps under SEC jurisdiction, while the CFTC regulates other prediction market contracts with a light-touch approach under President Trump. Polymarket declined to disclose whether discussions with the SEC or CFTC regarding U.S. market entry are underway.
SEC and CFTC Hold Separate Jurisdictions Over Prediction Markets
U.S. prediction market contracts covering elections and sports fall under CFTC regulation, which has adopted a light-touch approach under President Trump. Contracts tied to equity prices, however, constitute security-based swaps requiring SEC oversight. These equity-linked derivatives may only be tradable by Eligible Contract Participants—the derivatives market equivalent of accredited investors. Polymarket's private share betting markets remain offshore-only, with no confirmed timeline for U.S. regulatory approval.
U.S. Residents Access Offshore Platform Despite Restrictions
Polymarket's press release omitted mention of geographic restrictions, but the company confirmed to Axios that the private share betting product is available only via its unregulated offshore app. U.S. residents are not permitted to use the platform but regularly access it through VPNs and other methods. The offshore structure allows Polymarket to operate outside U.S. regulatory frameworks while serving American users through technical workarounds.
Nasdaq Private Market Provides Resolution Data
Nasdaq Private Market serves as Polymarket's resolution data provider for the private share betting offering. NPM, which spun off from Nasdaq years ago, remains partially owned by its former parent company. Nasdaq retains an equity stake in NPM, while the New York Stock Exchange's parent company holds a major investment position in Polymarket. NPM declined to comment on the partnership, referring all inquiries to Polymarket.
FAQ
Why did Polymarket launch private share betting offshore instead of in the U.S.?
Polymarket launched the product exclusively on its offshore app because U.S. equity-tied contracts constitute security-based swaps requiring SEC regulation. The company has not disclosed whether it is in discussions with the SEC or CFTC about offering these markets domestically.
What is Nasdaq Private Market's role in Polymarket's private share betting?
Nasdaq Private Market serves as the resolution data provider for Polymarket's private share betting markets. NPM spun off from Nasdaq, which retains an equity stake in the company.
