Many states have begun to take action against online prediction-markets. Kalshi is almost always the named defendant. Polymarket shows up far less often as a direct target and this isn’t because Kalshi handles three times the volume of Polymarket.
The gap in scrutiny isn’t about size at all. It’s about legal status. More than 20 legal challenges against prediction-market platforms are now active across the country, a number that keeps climbing.
Kalshi is a CFTC-licensed Designated Contract Market. The company was built to operate openly and legally across the United States. Polymarket’s main, high-volume platform has historically been offshore, and not legally available to US users at all, following a 2022 CFTC settlement that forced it to wind down its earlier non-compliant US operations.
One detailed industry analysis frames this precisely as a “two-tier enforcement landscape”. Kalshi “submits to CFTC oversight, pays for compliance infrastructure, and faces state enforcement actions,” while Polymarket “operates with lighter regulatory overhead but cannot legally serve U.S. customers on its primary platform.”
The 2022 settlement bars Polymarket the company from knowingly serving US customers. It doesn’t mean Americans are technically unable to reach the platform. In practice, large numbers of US users have continued accessing it through VPNs, effectively masking their location. That gap is exactly what the later federal scrutiny, including the 2024 FBI raid on Polymarket’s CEO, is actually about.
It’s not whether Americans can technically get to Polymarket, but whether the company did enough to genuinely prevent that access, or knowingly tolerated it while claiming compliance. Kalshi never had this problem to begin with, since it built its business to be openly, legally accessible from day one rather than officially banned but unofficially reachable.
That’s the structural core of it. Kalshi is the one actively, openly marketing itself as a legal domestic option in all fifty states, which makes it the natural target for “you’re operating illegally here” enforcement from states. Polymarket’s flagship platform technically isn’t supposed to be serving Americans at all, which puts state regulators in a different position.
Rather than “you’re operating illegally in our state,” the more relevant federal question about Polymarket has been “are you actually complying with the ban you already agreed to.”
One detailed report describes Kalshi’s own outside counsel meeting with federal prosecutors in Manhattan in the months before the FBI raided Polymarket CEO Shayne Coplan’s apartment in November 2024, walking the government through how a competitor’s platform actually worked. Kalshi’s spokeswoman disputes direct involvement in prompting that specific raid, saying the company learned about it from media reports and “routinely discusses compliance with the government.”
But separately, and more directly, multiple independent outlets report that Kalshi CEO Tarek Mansour admitted, in late 2024, to coordinating an anti-Polymarket social media campaign after the raid by paying influencers to spread claims that Polymarket and Coplan were involved in criminal activity. Mansour has since described the campaign as a mistake he regrets.
This also wasn’t a one-time incident. When rumors circulated that Polymarket intended to acquire a platform called Railbird, Mansour reportedly flagged concerns about that acquisition directly to CFTC officials. The effort failed, as the CFTC approved Railbird’s operating qualifications anyway in mid-2025. In any case the pattern is the same each time. Kalshi used its position as the compliant, licensed player to actively work against its rival with regulators, not just benefit passively from being the “legitimate” player in the industry.
This strategy has genuinely backfired on Kalshi. Early in this rivalry, Kalshi’s own flagging of concerns about Polymarket to the CFTC reportedly contributed to a broader regulatory caution that also blocked Kalshi itself from offering election-related contracts. This forced Kalshi to spend 2023 and 2024 suing its own regulator before winning back that ability.
Polymarket hasn’t just absorbed this, it’s reportedly counter-escalated. According to reports Polymarket compiled its own internal file, known as the “copycat dossier.” It contains specific evidence, alleging that Kalshi has been copying its products and marketing. They allege that Kalshi mirrored its product launches and ad timing down to the day, and internal suspicions have reportedly extended to corporate espionage, including speculation about a mole inside the company.
Despite all of this contention between the companies, their CEO’s, Coplan and Mansour, reportedly also launched a joint venture capital fund together, aimed at building infrastructure for the wider prediction-market industry. Kalshi and Polymarket have also joined Crypto.com to jointly sue the state of Kentucky through a newly formed industry association to block a prediction-market tax. So it is apparent that the relationship is direct competition and quiet business cooperation happening at the same time.
This isn’t a permanent structural divergence. It’s a current look of two companies that made opposite bets early on and are now converging. Polymarket acquired QCEX, a CFTC-licensed exchange and clearinghouse, for $112 million, creating “Polymarket US” as its own separate, regulated entity, distinct from the offshore platform most people mean when they say “Polymarket.” As that regulated company grows, expect Polymarket to start facing more of the direct, state-level targeting that’s so far been concentrated on Kalshi specifically.
Currently, the two platforms aren’t equally matched in scale. Per Dune Analytics, Kalshi handled $31.5 billion in trades in a single recent month, roughly three times Polymarket’s $10.6 billion over the same period. With the Polymarket CFTC-licenesed acquisition this gap in volume is sure to close as well.
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