Americans Bet $34B Offshore on Prediction Markets
A new report exposes the scale of U.S. demand leaking to unregulated foreign platforms.
Americans funneled as much as $34 billion into offshore prediction markets, with nearly one-third of total U.S. prediction market volume flowing through unregulated foreign platforms, according to a new report from a boutique consulting firm published June 11, 2026, via The Block.
Why It Matters
The scale of this offshore activity signals a significant regulatory arbitrage problem: American users are bypassing domestic compliance frameworks — KYC, AML, tax reporting — at a volume that rivals mid-tier sportsbook handle figures. For licensed operators and regulated prediction platforms like Kalshi and Polymarket's U.S.-facing products, this represents both a competitive disadvantage and an argument for cleaner federal rules. Regulators at the CFTC, which oversees prediction markets in the U.S., now face pressure to either tighten enforcement against offshore access or expand the legal domestic market to capture demand. Gambling always carries financial risk, and offshore platforms offer users little to no consumer protection if disputes arise.
Context
Prediction markets occupy a gray zone in U.S. financial regulation, classified as derivatives contracts rather than sports bets, placing them under CFTC jurisdiction rather than state gaming boards. Demand surged through the 2024 election cycle, with Polymarket alone recording billions in political event volume driven heavily by American-linked wallets despite technically barring U.S. users. The offshore flow documented in this report reflects a pattern familiar from early online poker — domestic demand that outpaces legal supply tends to migrate rather than disappear.
What's Next
Expect this report to surface in congressional or CFTC discussions around prediction market legislation currently circulating as of June 2026. If regulators treat the $34 billion figure as lost taxable volume, the case for expanding licensed domestic access strengthens considerably.
Source: The Block, June 11, 2026. Gambling involves risk; offshore platforms carry additional legal and financial exposure for U.S. users.
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