A groundbreaking study by Rutgers University statistician Harry Crane has illuminated a substantial and seemingly illicit flow of capital from the United States into Polymarket, a popular crypto-based prediction market platform that has been officially banned for American users since 2022. The research estimates that approximately 30 percent of Polymarket’s total trading volume originates from the U.S., a remarkable figure considering that these individuals are legally prohibited from accessing the platform. This clandestine participation suggests a significant workaround of regulatory measures, raising questions about enforcement and the evolving landscape of decentralized finance.
The study, commissioned by the Coalition for Prediction Markets, a lobbying group representing industry players like Kalshi and Coinbase, provides the first comprehensive public estimate of U.S. involvement in Polymarket’s offshore operations. Crane’s methodology, while acknowledging inherent imprecision, relied on indirect proxies to infer U.S.-based activity. By analyzing trading patterns, including the timing of transactions and the specific markets chosen – with a notable preference for U.S.-centric sporting events and elections – Crane deduced the likely geographic origin of a significant portion of trades.
The Scale of Clandestine Trading
Crane’s estimations are particularly striking in their magnitude. The study suggests that individuals in the U.S. funneled between $10.6 billion and $26.7 billion through Polymarket between May 2025 and the end of April 2026. This volume underscores the allure of prediction markets, even when access is restricted. Polymarket, known for its wide array of tradable events – from the outcomes of major sporting championships and the volatility of cryptocurrency prices to geopolitical developments – has cultivated a global user base. However, the findings indicate that U.S. traders are not merely casual participants; they are reportedly driving a significant portion of the platform’s economic activity.
The study’s findings are particularly pronounced within Polymarket’s sports betting vertical, where U.S.-based traders are estimated to account for roughly half of all activity. This suggests a strong appetite among American users for speculating on sports outcomes, a market that often sees high engagement and liquidity. The fact that this engagement is occurring on a platform that is legally inaccessible to them highlights the lengths to which users may go to participate.
Regulatory Backstory and Platform Evolution
Polymarket’s current predicament stems from a 2022 ruling by federal regulators who determined that the platform was operating as an unregistered derivatives trading platform. This classification led to its prohibition for U.S. users. In response to regulatory pressures and to maintain a presence in the U.S. market, Polymarket launched a separate, licensed prediction market called Polymarket US in December 2025, accessible via a dedicated mobile app.
However, the study by Crane indicates that the primary, crypto-based offshore platform remains the significantly larger marketplace. Data from a Pew Research report cited in the original article reveals that in April 2026, Polymarket US recorded approximately $1.6 billion in trading volume, while the offshore platform surged to around $9 billion. This disparity suggests that a substantial portion of the U.S. market continues to favor the more extensive and perhaps more liquid offshore platform, despite the legal barriers.
To circumvent the digital blockade, U.S. traders are believed to be employing sophisticated methods, most notably Virtual Private Networks (VPNs), to mask their geographic locations. While Polymarket’s terms of service explicitly prohibit the use of VPNs, the study’s findings suggest that these restrictions are not universally adhered to. The reliance on indirect methods to gauge user activity underscores the inherent difficulty in precisely quantifying the scale of such operations, making Crane’s study a significant contribution to understanding this opaque segment of the market.
Methodology and Expert Analysis
Harry Crane, a statistician with a distinguished background as a member of the Commodity Futures Trading Commission (CFTC) Innovation Advisory Committee, approached the challenge of estimating U.S. participation with a nuanced methodology. Lacking direct access to user geolocation data, Crane’s approach assumed that U.S. traders exhibit distinct behavioral patterns compared to their international counterparts. These patterns include the temporal distribution of trades – when specific trades are executed throughout the day – and the thematic focus of the markets in which they engage. The assumption that U.S. traders demonstrate a heightened interest in U.S.-based sporting events, for instance, served as a key indicator.
Charles Martineau, an associate professor of finance at the University of Toronto Scarborough who has researched trading behavior on prediction markets, commented on Crane’s approach. Martineau stated, "It’s not perfect, but I think it provides a reasonable estimate of the fraction of the volume attributable to offshore trading. But using these indirect proxies is common in finance research." This endorsement from an academic expert in the field lends further credibility to the study’s findings, acknowledging the practical limitations and established research techniques employed.
The study’s funding by the Coalition for Prediction Markets, an industry group with a vested interest in the success and regulation of prediction markets, warrants a note of transparency. However, Crane maintained editorial control over the research, a crucial detail that helps to assure the objectivity of the findings. The absence of Polymarket, a major player in the prediction market space, from this coalition is also noteworthy, suggesting potential divisions or differing strategies within the industry.
Regulatory Scrutiny and Enforcement Challenges
The Commodity Futures Trading Commission (CFTC) generally lacks jurisdiction over offshore prediction markets. However, the agency’s chairman, Michael Selig, has previously indicated a willingness to exercise extraterritorial jurisdiction on a case-by-case basis to address misconduct. The extent to which the CFTC would pursue U.S.-based traders who utilize VPNs to circumvent bans, particularly if they otherwise adhere to market laws, remains an open question. The CFTC did not respond to requests for comment on this specific issue.
The challenges of enforcement were starkly illustrated by a high-profile case in April. The Department of Justice charged a U.S. special forces soldier with allegedly leveraging classified information regarding the capture of former Venezuelan president Nicolás Maduro to profit approximately $400,000 from trades on Polymarket. This incident serves as a potent example of how sensitive information can be exploited within prediction markets, even those operating beyond direct U.S. regulatory oversight. It also highlights the potential for insider trading and the difficulties in policing such activities across international borders.
Future Implications and Market Projections
The implications of Crane’s study extend beyond the current regulatory landscape. If Polymarket’s crypto-based platform maintains its current market share, the study projects that U.S.-based trading volume could surge to an astonishing $133 billion by 2030. This projection underscores the immense growth potential of prediction markets and the persistent demand for such platforms, even in the face of regulatory hurdles.
The findings raise critical questions for regulators and policymakers: How can U.S. laws be effectively enforced in an increasingly decentralized and borderless digital economy? What are the broader societal implications of individuals engaging in speculative trading on platforms that fall outside domestic regulatory frameworks? The study serves as a wake-up call, signaling that the allure of prediction markets, coupled with the perceived anonymity offered by offshore, crypto-based platforms, is creating a significant and largely unmonitored economic activity within the United States. The continued growth of this shadow economy poses a substantial challenge to maintaining market integrity and protecting consumers.
