Shoppers in New York City lined up in Greenwich Village on Thursday for the grand opening of free grocery store Polimarket. The market, perhaps named after New York City Mayor Zoran Mamdani’s proposed municipal grocery store, will only be open until 7pm on Sundays.
But its eponymous sponsor, a prediction market that allows users to trade yes or no on the outcome of real-world events, from Super Bowl coin flips to Federal Reserve interest rate cuts, appears to be here to stay.
That doesn’t necessarily seem to be the case. In 2022, the Commodity Futures Trading Commission fined Polymarket $1.4 million for operating as an unregistered derivatives market and forced the company to block its US users.
The company continued its offshore operations and in July 2025, acquired QCEX, a regulated and licensed options trading platform holding company, for $112 million. The move paves the way for the company to receive approval from U.S. federal regulators in November. The company is relaunching a beta version of its app in the U.S. and gradually rolling it out to users on a waiting list. Polymarket does not disclose its current number of users.
Calci, a prediction market that competes with Polymarket, is currently embroiled in a legal battle at the state level, with regulators in states such as Nevada, New York and New Jersey arguing that trading event contracts for sports constitute gambling, subject to state jurisdiction and taxed differently than financial markets.
State regulators in Massachusetts recently won an injunction against Calci in court, temporarily barring Calci from offering sports-related contracts in the state.
In response to the lawsuit, a Calci spokesperson told CNBC, “Massachusetts is relying on outdated laws and ideas to block Calci’s innovation.” The company said it was “ready to defend (our technology) again in court.”
Polymarket filed a lawsuit against the state this week, with company representatives saying Polymarket wants to avoid “imminent and irreparable harm resulting from Massachusetts’ enforcement of state gaming laws against a federally regulated derivatives exchange.”
Meanwhile, funds from customers continue to flow in. Carsi’s CEO estimates the company’s transaction value exceeded $1 billion during the Super Bowl. This includes a $100 million deal for halftime performer Bad Bunny, depending on which song he performs solo first.
How prediction markets work
So how does this work? Prediction markets operate on event contracts, which are essentially financial instruments that allow you to buy shares in the outcome of an event. The prices of these stocks range from $0 to $1, and their value reflects the likelihood that the selected outcome will materialize.
Prior to the Super Bowl, the price of a contract the Seattle Seahawks expected to win in both polymarkets and calci was $0.68, according to Barron’s, meaning Seattle has a 68% chance of winning according to those markets. Once the final whistle blew, all Seattle contracts purchased regardless of price were worth $1 per share. His contract with the New England Patriots was all worth $0.
Unlike traditional casinos, purchasing these event contracts is not playing against the “house.” Rather, platforms like Polymarket and Kalshi allow traders to collect a small fee on each trade and buy and sell contracts among themselves. The more money is collected on the “yes” or “no” side of a particular event, the higher the price of the contract.
For example, the stock price predicting a Seahawks victory in the Super Bowl rose as it became clear that Seattle would win, approaching $1.
Importantly, investors can buy and sell options at any time before the event ends. Suppose you choose “yes” to a fringe political candidate to win the election for $0.05. A month later, the candidate gave a landmark speech that boosted his popularity. If more money flows into the candidate, the price will go to $0.10. If you think the stock price might go up (or you might actually win), you can hang on to the stock, or you can sell it for twice what you paid for it.
Basically, these markets provide real-time odds on future events, according to crowdsourcing of people participating in the game.
On some level, this has always been the case, says Stephane Ouellette, co-founder and CEO of digital asset investment bank FRNT Financial. For example, he says, some people who understand the intricacies of oil futures can speculate that political tensions in the Middle East could boil over.
“There have been significant innovations that have allowed us to transform these markets into more understandable information that retail traders can understand,” Ouellette says. “Until now, you needed a qualification like a PhD in market analysis to understand this.”
Experts say you need to tread carefully when putting money behind predictions
Whether buying contracts in a prediction market constitutes gambling, similar to betting at a sportsbook, is a matter of legal debate. But when it comes to investing and managing your money, this distinction is meaningless, says Ivory Johnson, a certified financial planner and founder of Delancey Wealth Management.
“It’s an old adage, you have to know how much you’re willing to lose,” he says. “It’s no different than going to Las Vegas with your friends.”
Of course, financial experts say it’s wise not to make predictive contracts a major part of your investment strategy, no matter how confident you are about the future outcome of a particular event.
At best, they’re in an “opportunity portfolio,” says Doug Bonepers, CFP and founder of Born Fied Wealth. This part of the portfolio, which can make up 5% to 10% of investable assets, is reserved for riskier investments such as individual stocks, cryptocurrencies, niche exchange-traded funds, and perhaps a forecast or two, Bonepers says.
The rest typically belongs in a broadly diversified investment portfolio that you plan to buy and hold for the long term, he says. The idea here is that even if the forecast ends up being zero, the loss is not enough to derail your financial plan.
“Most retail investors should approach investing as a game of long-term consistency and discipline, allowing them to quietly grow their profits over time,” Vonepers says. “So[prediction markets]may be part of the puzzle, and I think it’s a bit of a stretch, but it definitely falls into more of a speculative opportunity.”
Johnson recommends thinking of prediction markets as part of your entertainment budget, the same way you think about how much you spend each month on a hobby like golf. That way, you’re just doing it for fun, he says, and whether you make a profit on the predictions is incidental.
“It would be great if we could make money,” he says. “But when you start thinking, ‘I’m smarter than everyone else, so I’m going to do this, and it’ll pay my mortgage,’ that’s when you start having problems.”
Disclosure: CNBC and Kalsi have a commercial relationship that includes a minority stake.
Want to improve your communication, confidence, and success at work? Take CNBC’s new online course, Mastering Body Language for Influence. Sign up now and use coupon code EARLYBIRD to receive a 20% off introductory discount. Offer valid from February 9th to February 23rd, 2026. Terms and conditions apply.
