Polymarket Applies for Regulated Margin Trading in the US: Institutionalization of Prediction Markets and Competition with Kalshi

Polymarket has submitted an official application to regulators to provide regulated margin trading within the United States. This application, filed on July 9, 2026, is considered the most significant step for the platform to secure institutional-level legitimacy. It demonstrates Polymarket's commitment to transforming into a fully institutionalized financial service after being forced out of the US market due to past regulatory violations.

This application is part of Polymarket's strategy to expand its functions beyond a simple prediction market to a Designated Contract Market (DCM). It is expected to significantly improve market liquidity by narrowing the gap with competitor Kalshi and attracting professional investors.

The core purpose of the margin trading application is to allow users to bet on events without paying the full contract amount upfront. Through this, Polymarket aims to attract sophisticated traders who value capital efficiency. An environment where larger positions can be taken with less capital is expected to act as a catalyst for amplifying market trading volume.

Trading contracts on Polymarket US involves a significant risk of loss. Users should carefully determine whether such trading is suitable for them, considering their financial situation and risk tolerance.

This move by Polymarket is the result of multi-year regulatory recovery efforts following a 2022 settlement with the Commodity Futures Trading Commission (CFTC). At that time, Polymarket was fined for operating an unregistered derivatives platform and blocked access for US users. Since then, the platform has made regulatory compliance its top priority and has been laying the groundwork for re-entering the US market.

Strategic Moves for Regulatory Recovery and Market Re-entry

In July 2025, Polymarket reached a decisive turning point by acquiring QCEX, a CFTC-licensed derivatives exchange and clearinghouse, for $112 million. This acquisition provided the legal foundation for Polymarket to operate within a legitimate regulatory framework in the United States. At the same time, investigations by the Department of Justice (DOJ) and the CFTC concluded without further charges, restoring the platform's external credibility.

• Securing and maintaining CFTC-approved Designated Contract Market (DCM) status
• Performing strict Know Your Customer (KYC) procedures for all users in the United States
• Operating an advanced VPN detection system utilizing IP reputation data and browser fingerprinting
• Establishing a transparent fund management and operational structure through registered intermediaries

In terms of the competitive landscape, Polymarket faces the challenge of narrowing the gap with Kalshi. Kalshi is already enjoying a first-mover advantage, having received approval for margin trading from U.S. regulators in March 2026. While Kalshi focuses on structured financial products, Polymarket plans to acquire users by leveraging its characteristic broad event coverage.

The shift in the U.S. political and regulatory environment toward a more favorable stance on prediction markets in 2026 is also working to Polymarket's advantage. The second Trump administration is showing a more open attitude toward event contracts than before, and movements toward related deregulation are being detected. In particular, analysis suggests that figures like Donald Trump Jr. are helping to build political capital by advocating for such platforms.

The introduction of margin trading is expected to demonstrate its power in the upcoming November 2026 midterm election market. The fierce competition for control of the Senate and House is a major driver that will push prediction market trading volumes to record highs. If margin trading is permitted, a massive influx of funds from investors looking to bet on election outcomes is expected to significantly deepen market liquidity.

On the technical side, Polymarket US operates a high-level security system for regulatory compliance. The platform applies sophisticated VPN detection technology to prevent bypass access by users outside the United States and takes strong measures, such as freezing accounts, if violations are discovered. This is an expression of a strong will to maintain trust with regulators and avoid repeating past mistakes.

However, risk management associated with margin trading remains an important challenge. Polymarket warns of the possibility of rapid asset loss that leverage trading can cause through its own risk disclosure statements. A key point to watch in the future is how Polymarket's internal control systems for investor protection and maintaining market integrity will function in a real-world operational environment.

Ultimately, Polymarket's future depends on the CFTC's final decision regarding this application for margin trading. If approval is granted, Polymarket will have the opportunity to establish itself as the undisputed largest regulated prediction market in the United States. The industry anticipates that this application will serve as an important milestone in accelerating the institutionalization and popularization of prediction markets.