Regulators in several jurisdictions have banned the Web3 prediction market platform Polymarket, labeling it a gambling platform. But attorney Aaron Brogan argues the authorities’ reasoning is unfounded, according to a CoinDesk report.

Singapore, Thailand, and Taiwan have each taken steps to ban Polymarket, which has also faced scrutiny from regulatory and law enforcement agencies in France and the U.S..

Core Difference from Bookmakers

In Brogan’s view, authorities erroneously equate decentralized prediction markets with traditional betting operations. Traditional bookmakers, he explains, effectively bet against their customers, setting payout odds. Their earnings depend on those odds and the outcome of the event.

By contrast, platforms like Polymarket and Kalshi act as neutral intermediaries, matching users’ trades. They do not take one side of the bet and earn revenue purely through transaction fees.

“Prediction markets are not gambling because they aren’t structured that way. They’re tools for insight, hedging, and delivering public good. That’s what makes them fundamentally different,” the lawyer emphasized.

U.S. Regulatory Framework

In the U.S., such activities fall under the Commodity Exchange Act at the federal level, requiring participants to register with the CFTC as Designated Contract Markets (DCMs). Holding that status exempts them from state-level gambling regulations.

Kalshi worked to secure a DCM license and recently rolled out a market for betting on the Super Bowl. Polymarket is not registered in the U.S., which Brogan suspects is behind its issues with law enforcement—local authorities may have filed charges.

Crypto.com has submitted a self-certification request to the CFTC to operate its Sports platform as a DCM. Under those rules, if the CFTC does not respond within 24 hours, the applicant may regard it as a green light. Analysts wonder to what extent the entry of decentralized platforms threatens traditional bookmakers.

“If they keep multiplying and the CFTC doesn’t intervene—which it hasn’t so far—they’ll eventually eat the bookmakers’ lunch. This is a $21 billion industry, and these new products will be far superior,” Brogan concluded.

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