To succeed in the U.S., Kalshi and Polymarket rely on a close relationship with the federal government. The New York-based companies need the Commodity Futures Trading Commission (CFTC) to treat prediction markets like a financial asset so they can avoid state gambling laws and related taxes.
But the CFTC does not provide shelter from international statutes.
That poses a problem for Kalshi and Polymarket as they try to justify valuations that have increased from below $1 billion in early 2025 to $22 billion and $15 billion, respectively, with reported in-progress funding rounds likely to take those numbers even higher. The duo is mired in an international slump marked by pullbacks from key regions after being threatened with sanctions. Many governments outside the U.S. are dubious of six-leg parlays on NBA games, for example, being sold as financial instruments.
“Most countries are looking at it as a gambling product,” Pierre Lindh, managing director and event organizer at gaming insights company NEXT.io, said in an interview. “There aren’t really that many rays of sunshine so far from an international perspective. … [Gambling licensing] is not really the path Kalshi and Polymarket want to take.”
As Kalshi and Polymarket stall internationally, operators without as much riding on the U.S. market believe they can capitalize.
Matchbook and Bruin Capital-backed WagerWire are among the prediction market companies willing to identify their products as gambling in regions where local governments demand it. Ireland-based Matchbook holds a betting license for its exchange in the U.K. and Mexico and is eyeing similar agreements elsewhere; it’s simultaneously applying to operate in the U.S. under the CFTC’s financial framework.
In contrast, Kalshi and Polymarket, who insist they offer financial services, don’t want to label themselves as gambling companies overseas while facing legal challenges in the U.S. about how their products are defined.
“I see that as a massive advantage for us,” Matchbook CEO Ronan McDonagh said in a video interview.
For a time last year, Kalshi and Polymarket postured as if international success would come easily. In October 2025, Kalshi released a splashy video featuring the late Freddie Mercury to announce bold international plans. A company official even claimed Kalshi would go live in China.
Kalshi seldom mentions its non-U.S. operations now and has quietly withdrawn from many of the world’s most populous nations, including China, India, Brazil and Nigeria. All told, the number of people outside the U.S. whom Kalshi restricts from its app is larger than the population it permits.
Polymarket’s international exchange, which is separate from its U.S.-regulated platform, is also in retreat. Last month, the Financial Times reported Polymarket is lobbying European and U.K. officials to treat it as a financial exchange so it could regain access to citizens there, but the company has not yet changed any regulators’ minds.
Kalshi declined to comment on the record. Polymarket did not respond to a request for comment.
The U.K. gambling industry watched with some bemusement as prediction markets first took hold in the U.S. last year following President Donald Trump’s inauguration. British gambling operators like Betfair have processed wagers on exchanges for decades. Many wondered why Americans were making such a big deal of it.
Even though the mechanics of prediction markets are familiar in some parts of the world, the continued growth of Kalshi and Polymarket has now persuaded once-dubious investors to get involved.
“I’ve rebranded as a prediction market expert to join the party,” McDonagh joked, crediting Kalshi and Polymarket for making the well-trodden concept of exchange betting “kind of cool again.”
Bruin Capital, a sports-focused private equity firm with a global investment portfolio, similarly viewed prediction markets as a meaningful opportunity when it signed off on betting subsidiary FairPlay Sports investing in Wire Markets, the creator of the international exchange WagerWire, last month.
Approved as a betting exchange in Gibraltar, Wire Markets CEO Zach Doctor told Sportico the company is in the process of getting approved Mexico and the U.K.
The Gibraltar approval “just gets us into the front of the line and looked upon favorably in those other places,” Doctor said.
Countries where sports betting is banned, such as India, will be tougher if not impossible to break into for Matchbook, WagerWire and similarly situated operators. Then again, those companies have different investor growth expectations than Kalshi and Polymarket, potentially meaning less pressure for total global conquest.
There’s also some distrust of prediction markets in certain areas, however they’re packaged, where Polymarket and Kalshi attempted to reach citizens without permission.
Polymarket and international technology partner Adventure One QSS paid more than $200,000 as part of an April 2025 settlement with the Ontario Securities Commission “for their failure to comply” with a local ban on prediction markets. Also last year, Australia told internet providers to block Polymarket on account of the company “providing a prohibited interactive gambling service.”
Brazil forced Kalshi offline in April, with finance minister Dario Durigan saying, “This product that was being presented as a security carried the potentially very destructive features of gambling.” Kalshi co-founder Luana Lopes Lara was born in Brazil.
“You can only go so long bullying your way into other people’s worlds,” McDonagh, the Matchbook CEO, said.
Polymarket owns two exchanges—one in the U.S. and one that purportedly just serves customers outside the States. But as Sportico has reported, people in the U.S. have been able to circumvent the latter platform’s rules, and that stateside activity makes it difficult to know how much of the international exchange’s betting volume comes from elsewhere.
Kalshi, meanwhile, only operates one exchange. It does not share what percentage of its activity comes from outside the U.S.
A few highly populated countries remain in play for Kalshi and Polymarket, at least for now. Professional traders believe those locations powered significant cross-border order flow during sports games earlier this year.
The most-referenced example of this action is Mexico’s men’s World Cup knockout loss to England, which became Kalshi’s highest-volume match of the tournament and one of its biggest events of all-time.
Professional traders have said they took advantage of a rush of retail users who were willing to take moneyline odds on Mexico winning even when advanced proprietary models showed those odds straying far from the actual probability of an El Tri win. Market makers have posited that fans based in Mexico poured into the losing side at skewed prices, though there are alternate explanations, such as the large immigrant population within the U.S. driving line movement.
“The World Cup was about as good as it’s gonna get” for sharp oddsmakers, pro bettor John Shilling said on The Risk Takers Podcast, “as far as how easy it is to just make a lot of money and turn your balance over at a very low risk amount.”
The Mexican government has not taken a formal stance on prediction markets, and the country is not on Kalshi or Polymarket’s restricted lists.
But according to La Jornada, officials are actively reviewing whether companies should be allowed to offer them without a gambling license.