$34B in US Bets Flowed to Offshore Prediction Markets

Prediction market volume quadrupled in 2025, and U.S. traders accounted for more than $34 billion of activity on platforms that are supposed to block them. A new report from Crane Zeng estimated that U.S.-based users generated between $11 billion and $34 billion in total offshore prediction market volume last year. Polymarket accounted for $11 billion to $27 billion of that activity.

The report described its estimate as conservative. It projected $133 billion in annual U.S. offshore volume by 2030 if current market share dynamics hold.

The mechanism that allows U.S. access is straightforward. Offshore prediction markets geo-fence American users, who are barred from unlicensed platforms under CFTC rules. Traders bypass those restrictions with VPNs and cryptocurrency wallets that do not require traditional identity checks. Crypto wallets reduce friction around account creation and verification, making blockchain-based venues harder to police than bank-linked platforms, the report said.

Blockchain-based prediction markets differ from traditional financial platforms in one key respect. Users can open positions through a self-custody wallet without submitting identifying documents or linking a bank account. That structural feature makes enforcement of geographic restrictions more difficult than on regulated exchanges that require customer onboarding procedures.

Prediction markets expanded rapidly over the past two years. Platforms offer yes-or-no contracts on politics, economics, sports, entertainment, and other real-world events. Total tracked volume rose from $16.8 billion in 2024 to $65 billion in 2025, the report said, a near fourfold increase.

The regulatory framework around prediction markets shifted over the same period. The CFTC requires platforms serving U.S. customers to register and obtain a Designated Contract Market license. The agency took a more lenient approach after Kalshi's court victory against the agency opened the door for broader event-market activity, including election contracts that were previously blocked.

Polymarket was barred from the U.S. in 2022 after serving American users without proper registration. The platform reentered through a regulated subsidiary after acquiring derivatives exchange QCEX, adding licenses that its global offshore venue does not hold. That venue still blocks U.S. users.

The report's data tracks a market where regulated platforms are gaining share while total activity surges. Offshore prediction markets captured 84.4% of combined annual volume across tracked platforms in 2024, or roughly $16.8 billion. In 2025 the offshore share fell to 60.9% of a $65 billion total.

A broader measurement that includes a wider set of platforms tells a similar story. Offshore platforms processed $85 billion over the measured period, the report said. That represented 54% of the total market, down from 84% in 2024. Regulated U.S. venues accounted for the remaining $74 billion. Kalshi alone handled $70 billion of that amount. Other regulated operators include Crypto.com, IBKR ForecastEx, and Gemini.

Different user segments favor different platform types, the report said. Institutional traders prefer regulated venues for their legal clarity and counterparty protection. Retail traders gravitate toward offshore platforms for looser onboarding and broader market access. That gap between legal access and actual user behavior creates a persistent compliance problem.

The CFTC faces a structural enforcement problem. A lighter-touch domestic policy supports innovation on regulated platforms, the report said. The same policy tests whether the agency can keep unlicensed venues from serving U.S. customers in practice. If prediction market volume continues growing at the current pace, regulators will need to decide which products fall under derivatives law and how geo-fencing should be enforced.

The report projected $133 billion in annual U.S. offshore volume by 2030 if current market share dynamics hold. That outcome depends on whether enforcement or platform-side controls become more effective at blocking U.S. users from unlicensed venues.