Like it or not, online betting is here to stay, or so it seems for now.
Though gambling is nothing new, and sports betting, albeit largely illegal in the U.S. until 2018, has always been popular, online betting has exploded since then, when sports betting was federally legalized when the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 (PASPA) in the case of Murphy v. National Collegiate Athletic Association.
That ruled that the federal government could not prohibit states from authorizing sports betting, and now, there are only 11 states, among them California, Alabama, Utah, South Carolina and Texas, where it remains illegal.
That certainly hasn't stopped platforms like FanDuel and DraftKings from amassing a massive base, and moreover, now prediction markets like Polymarket and Kalshi are cashing in on it as well.
What is Polymarket?
The world's largest prediction market currently stands as Polymarket, a cryptocurrency-based prediction market founded in 2020 by then 21-year-old Shayne Coplan, a college dropout turned billionaire. Unlike a traditional bookie, where you bet against the house, Polymarket users trade binary contracts, priced between $0 and $1, where the contract price acts as the market's real-time probability estimate of that outcome; if you are correct, the contract settles at $1.00.
Speaking with Anderson Cooper for CBS News, Shayne described the platform as "a site where you can basically bet on current events. Some sort of question about the future, like an election. And as a result, when a ton of people are betting, you get the betting odds, which basically tell you how likely each outcome is."
On Polymarket, you can bet on a variety of topics — there are usually around 10,000 questions posted at a time — including pop-culture questions like when or where will Taylor Swift and Travis Kelce get married or who will win the Super Bowl, and politics, with questions about the Ukraine-Russia conflict or whether Donald Trump was going to win against Vice President Kamala Harris in November 2024.
The latter bet was accurately predicted about a month before Election Day, when most conventional pollsters and pundits argued it was far too close to have a prediction, and a whopping $3.6 billion was wagered on the question.
Meet its founder
Shayne, 27, grew up in Manhattan's Upper West Side, and went to public school In Hell's Kitchen. He began studying computer science at New York University before the COVID-19 pandemic hit, ultimately dropped out his freshman year, and founded Polymarket.
Since then, billionaires like Figma's Dylan Field, Zynga's Mark Pincus, Uber's Travis Kalanick and hedge fund manager Glenn Dubin have become investors, and now, Shayne himself has become a billionaire too, with a net worth of $1 billion, with Polymarket's own valuation currently at $9 billion, per Forbes.
The FBI raid and its legality in the U.S.
There have been some concerns about Polymarket, particularly it thriving under an administration that favors deregulation. One month after the 2024 election, the FBI raided Shayne's apartment and seized his devices as part of an investigation into a possible violation of its agreement to block U.S. ers after it was ordered to pay a $1.4 million fine to the Commodity Futures Trading Commission for offering unregistered markets.
However in July, the Department of Justice and CFTC dropped the investigations, Polymarket then announced it had acquired CFTC-licensed derivatives exchange QCX for $112 million to prepare for a compliant U.S. launch, plus, just days after Donald Trump Jr. joined its advisory board (he has also served as a strategic advisor to Polymarket’s main competitor Kalshi), the company received federal approval to launch in the U.S.