Prediction Market Report Shows $11B-$34B Offshore US User Activity

A new report reveals that U.S. users drove $11 billion to $34 billion in offshore prediction market volume, with Polymarket accounting for up to $27 billion of that activity. The findings highlight the regulatory arbitrage driving American traders to unregulated platforms, though offshore market share declined from 84.4% in 2024 to 60.9% in 2025 as domestic alternatives like Kalshi gain traction.

The prediction market landscape is undergoing significant structural shifts as American users navigate the regulatory divide between offshore and domestic platforms. This report quantifies the scale of regulatory arbitrage: while Kalshi processed approximately $70 billion of the $74 billion in regulated U.S. prediction market volume, offshore platforms captured substantially larger activity from American participants seeking broader market access and reduced compliance friction.

The regulatory environment created this bifurcation deliberately. Offshore platforms like Polymarket operate without U.S. registration, enabling derivatives betting on political, sports, and event outcomes that domestic regulators restrict. American users employ VPNs and blockchain-based access methods to circumvent geographic restrictions, creating a shadow market that exceeds regulated alternatives by multiples. The $11-$34 billion range reflects uncertainty in attribution methodologies, but even conservative estimates demonstrate substantial capital flows.

The year-over-year decline in offshore share—from 84.4% to 60.9%—signals market maturation as Kalshi and competitors expand regulated offerings. This migration reduces regulatory risk for participants while enabling platforms to operate transparently within U.S. frameworks. However, the persistence of offshore dominance despite regulatory alternatives indicates that users value market breadth and derivative complexity over compliance certainty.

Looking forward, regulators face pressure to clarify prediction market rules or risk continued offshore migration. Platform operators must balance regulatory compliance with feature parity to capture shifting volume. The trajectory suggests eventual consolidation toward regulated platforms, but the current bifurcation persists because offshore platforms offer functionality domestic alternatives cannot legally provide.

• →U.S. users drove $11B-$34B in offshore prediction market volume, with Polymarket representing up to $27B of that activity
• →Offshore market share declined significantly from 84.4% in 2024 to 60.9% in 2025, indicating regulatory alternatives are gaining adoption
• →Kalshi captured approximately $70B of $74B in regulated U.S. prediction market volume, demonstrating strong domestic market demand
• →VPN usage and blockchain platforms remain key mechanisms enabling U.S. users to access offshore prediction markets
• →The regulatory arbitrage persists because offshore platforms offer broader derivatives markets than current domestic alternatives