Gemini enters the US prediction market race

Abi Bray

12 December 2025 at 6:42am UTC-5

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Cryptocurrency exchange Gemini has obtained a designated contract market license after a five-year application process, allowing the company to compete with Kalshi and Polymarket in the US prediction market sector.

The company first applied for the license in March 2020, with approval arriving this month. Gemini attributed the timing to what the company’s leadership described as a more supportive political climate.

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The license permits Gemini Titan to offer yes-or-no event contracts to US customers. Web-based trading is expected first, with mobile access to follow. Users will be able to trade from USD accounts on the existing exchange.

Gemini Chief Executive Tyler Winklevoss said, “We thank President Trump for ending the Biden Administration’s War on Crypto. It’s incredibly refreshing to have a President and a financial regulator who are pro-crypto, pro-innovation, and pro-America.”

Gemini’s newly listed stock increased 13.7% in after-hours trading as investors assessed the impact of a well-capitalized entrant in a market occupied mainly by Kalshi and Polymarket.

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Gemini said the launch forms part of a larger derivatives plan, with expansions into crypto futures and perpetual contracts under consideration. Gemini President Cameron Winklevoss said, “Prediction markets have the potential to be as big or bigger than traditional capital markets.”

Prediction market Kalshi’s Chief Executive, Tarek Mansour, previously defined the rivalry between Kalshi and Polymarket as “ferocious.” Gemini’s arrival is expected to increase competition in the sector.

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The Backstory

How the ground shifted for a long-delayed debut

Gemini’s move lands after a multiyear reset in how crypto firms approach federally regulated event contracts. The change has been gradual but visible: crypto-native players and mainstream brokers alike have sought Commodity Futures Trading Commission perches to operate onshore and at scale. The dynamic accelerated this year as firms tested the limits of what constitutes a permissible “event contract” and how it should be supervised when it looks like sports betting to some state regulators and exchange-traded risk to federal overseers.

A separate pivot is unfolding in Washington. Donald Trump nominated lawyer and crypto adviser Michael Selig to chair the CFTC, a signal that crypto market structure and novel derivatives will be central to the agenda. That nomination coincides with new exchange applications and structures designed to make event markets look, operate and clear like traditional futures. One example is ProphetX, which filed for registration as both a designated contract market and a derivatives clearing organization and outlined an institutional-style request for quote parlay mechanism to price multi-leg exposure. The firm framed the dual filing as a step toward treating sports outcomes as an asset class under federal oversight, with review expected through 2026, according to its recent application.

That regulatory backdrop helps explain why a five-year wait can end quickly: the playbook for bringing prediction markets under futures law is clearer, and the competitive set is suddenly larger.

Rivals raced to lock down federal licenses

In parallel, competitors built or bought the infrastructure to scale event contracts inside the United States. Kraken announced a US$100 million purchase of the CFTC-licensed Small Exchange, positioning the crypto exchange to run a fully US-native derivatives venue under federal oversight for spot, futures and margin trading. Kraken said the deal “creates the foundation for a new generation of United States derivatives markets,” and confirmed interest in prediction markets as part of that buildout. The move follows months of firms leveraging the CFTC framework to enter or expand into prediction markets, and it tees up a race for liquidity, product breadth and compliance on a federal rail. Details are in Kraken’s acquisition of Small Exchange.

Robinhood struck a different path, partnering with Susquehanna to stand up a CFTC-licensed exchange and clearing house with day-one liquidity. The deal includes acquiring a designated contract market, a derivatives clearing house and a swap execution facility from MIAXdx, with MIAXdx retaining a 10% equity stake. Robinhood framed the build as a response to customer demand for prediction markets and an investment in infrastructure to deliver new products. The brokerage’s revenue jump in the third quarter underscored its broader trading momentum. More on the structure is in Robinhood’s partnership with Susquehanna.

State pushback redraws the battleground

The federal march has met resistance in the states, especially where sports event contracts blur categories. Kalshi’s expansion into sports event contracts triggered disputes in Nevada, New Jersey and Massachusetts over whether those instruments are functionally sports betting and therefore subject to state gaming laws. A note from the Nevada Gaming Control Board clarified it views sports event contracts as wagering even on federally regulated exchanges, sparking operational uncertainty for platforms straddling federal and state rules. That context is detailed in coverage of Kalshi’s run-ins with state regulators.

Incumbent casino operators have cheered the clarity. MGM Resorts International Chief Executive Bill Hornbuckle thanked Nevada regulators for drawing a line against prediction markets, calling them “without a doubt sports betting” and urging consistent regulation and taxation. His stance came as DraftKings and FanDuel withdrew from Nevada after warnings that prediction products could imperil their licenses. MGM has said its BetMGM unit would be a fast follower if prediction markets materially reshape sports betting, but for now it sees the category as subject to existing gaming frameworks. The remarks are covered in MGM’s response to Nevada’s position.

Distribution power and the Polymarket factor

Polymarket set the pace in consumer mindshare and product iteration even as regulatory boundaries remained in flux. A new partnership with X established Polymarket as the platform’s official prediction market partner, with plans to integrate real-time probabilities, Grok’s analysis and X’s live data. The tie-up aims to deliver contextualized insights to a mass audience and could compress the gap between social conversation and tradable information. The company says users made more than US$8 billion in predictions in 2024 across politics, entertainment and news, reflecting the category’s pull during high-volatility news cycles. Details are in Polymarket’s partnership with X.

State-level challenges persist, particularly for rivals like Kalshi, but the distribution play matters. If prediction probabilities are embedded where users already consume news, order flow can follow. For new entrants, that raises the bar on user acquisition, liquidity incentives and interface speed. For incumbents, it pressures them to deepen integrations and market data tools while defending regulatory positions.

New architectures aim to institutionalize sports risk

A second front is market design. ProphetX’s twin bid to become a DCM and DCO signals a push to embed sports outcomes in an institutional framework with direct counterparty pricing for multi-leg positions. The proposed RFQ Parlay Mechanism borrows from fixed income and options markets, promising dynamic price discovery that could reduce slippage and align sports derivatives with familiar trading protocols. Whether the CFTC blesses the structure will shape how far exchanges can go in offering complex exposures under futures law. See more in ProphetX’s filing.

Others are reviving shelved plans. RSBIX refiled to become a designated contract market to list sports event contracts, while daily fantasy operator PrizePicks secured National Futures Association approval under a subsidiary as it explores a prediction product. Those steps, noted alongside Kraken’s deal, show traditional gaming and fintech entrants looking to the CFTC as a path to legitimacy and scale. The broader picture is in Kraken’s licensing expansion.

What to watch as the market resets

The race now hinges on three levers. First is regulatory clarity: how the CFTC treats sports-linked contracts, whether state regulators accept federal jurisdiction and how a new chair might prioritize market integrity and consumer protection. Second is plumbing: exchanges that marry an onshore clearing stack to deep liquidity providers could set execution standards rivaling options and FX. Robinhood’s Susquehanna link and Kraken’s acquisition both point that way. Third is distribution: partnerships like Polymarket’s with X may widen the funnel faster than standalone apps can, while brokers with sizable retail bases can cross-sell with lower costs.

For competitors, the stakes are tangible. If event contracts mature into a durable asset class, winners will be those that convert headline volatility into steady volume, withstand state scrutiny and deliver low-friction onboarding in web and mobile. For policymakers, the outcomes will define where the line sits between wagering and federally supervised risk management, and who captures the tax, fee and surveillance benefits that follow. Firms jockeying for position have already placed their bets — by license, by acquisition or by partnership — and the next rulings will determine how quickly those investments pay off.