U.S. Wallets Gamble $571 Million on Polymarket Despite Regulatory Ban

U.S.-linked wallets engaged in approximately $571 million in trading of political contracts on Polymarket over the preceding year, according to analysis from on-chain research firm Allium. This trading volume marks a higher total than any other country, including Hong Kong, which contributed $422 million. Polymarket, which is not legally permitted to serve U.S. users, implements a ban based on IP addresses, but the on-chain data shows that American users have still been able to circumvent this restriction through methods like virtual private networks (VPNs).

Allium's investigation reveals that U.S. users tend to focus predominantly on geopolitical markets, accounting for 46% of their bets, in contrast to the broader Polymarket platform where such markets only represent 36%. Political elections generate 16% of bets from U.S. wallets but are more heavily favored in the overall market, which sees 32% of activity in that area. This pattern indicates a significant inclination among U.S. traders to engage in predictions related to foreign conflicts, like wars, rather than domestic elections.

The findings illustrate a significant oversight for regulators, as regulated U.S. platforms generally do not offer betting markets on these types of events. Kalshi, another prediction market, limits its offerings to economic data and elections, further driving demand to offshore markets like Polymarket where a broader variety of bets on regime changes and foreign wars can be placed. Despite restrictions, Allium's data suggests that blocking access has not diminished American participation, instead pushing the largest political betting volumes to unregulated platforms that fall outside U.S. oversight.

However, the effectiveness of U.S. wagers raises questions about the overall predictive power of American bettors. On resolved markets, U.S. wallets had a win rate of 81.9%, closely mirroring the 80.3% success rate seen across all users, revealing that Americans lack a substantial edge in picking outcomes. On occasion, American traders displayed bolder betting behavior, illustrated by their placing 53% of their volume on a hypothetical U.S. invasion of Iran, compared to the rest of the market, which contributed only 26% on that topic.

Polymarket did not respond to requests for comment, but the trends revealed by Allium raise important considerations for U.S. regulatory approaches to online betting markets. This enduring demand for illegal market participation may compel regulators to evaluate whether to adapt the legal framework governing such platforms to accommodate these interests onshore.