JPMorgan Chase stopped banking services for Polymarket in October 2025: report

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Banking friction follows prediction-market growth

JPMorgan Chase’s reported decision to stop providing banking services to Polymarket underscores a recurring tension for companies operating at the boundary of financial markets, gambling and technology: Growth can attract blue-chip capital and mainstream users while still making traditional banks wary.

Polymarket’s rise has been fueled by demand for event contracts tied to politics, sports, entertainment and financial outcomes. But its banking relationship reportedly ended as the company was attempting to rebuild its U.S. presence after earlier regulatory action. That sequence matters. For firms whose products resemble both derivatives and wagers, access to stable banking is not only an operational issue. It is a signal of institutional comfort with legal and compliance risk.

The current pressure comes despite Polymarket’s increasingly prominent place in the prediction-market sector. The company has drawn major backers, expanded trading activity and pursued a path back into the U.S. market through regulated infrastructure. Yet the loss of banking services from a top U.S. lender shows how quickly institutional support can become conditional when regulatory exposure is unclear.

A CFTC penalty set the baseline

Polymarket’s regulatory problems did not begin with banks. In 2022, the Commodity Futures Trading Commission fined the company US$1.4 million for operating an unregistered derivatives exchange. That action forced Polymarket out of the U.S. market and established the core question that continues to follow the company: whether event contracts should be treated as financial derivatives, gambling products or something in between.

The distinction carries high stakes. If prediction markets are regulated mainly as derivatives, federal oversight can give platforms a route to national scale. If they are treated as gambling, operators face state-by-state licensing, taxes, responsible gambling obligations and restrictions on product types. Sports contracts are especially sensitive because regulated sportsbooks already operate under state gambling laws and pay for access to those markets.

Polymarket’s strategy has been to align itself more closely with federal derivatives oversight. Its purchase of QCEX, a CFTC-regulated derivatives exchange, was a key step in that effort. The deal was framed as a way to support a U.S. return after a three-year absence, putting the company on firmer regulatory footing than its earlier offshore model.

That approach helped Polymarket attract attention from major financial players. But it also sharpened scrutiny from state gaming regulators and incumbent betting interests that see prediction markets as a competitive workaround. The same regulatory ambiguity that allows rapid expansion can make compliance departments at large banks cautious.

ICE investment moved Polymarket into the mainstream

Polymarket’s biggest credibility boost came when Intercontinental Exchange, the parent company of the New York Stock Exchange, pledged a US$2 billion investment that valued the platform at US$8 billion. The deal, detailed in Inside Asian Gaming’s report on the Intercontinental Exchange investment in Polymarket, positioned the company as more than a crypto-adjacent betting venue.

Intercontinental Exchange also said it would distribute Polymarket’s event-driven data, a move that suggested prediction-market pricing could become useful to institutional investors, media organizations and other data customers. That mattered because event markets can generate real-time probabilities on elections, policy decisions, economic releases and cultural events. If widely trusted, those prices could become alternative signals for risk managers and traders.

The investment followed backing from 1789 Capital, a venture firm associated with Donald Trump Jr., adding political visibility to a company already tied closely to election-related trading. According to a Reuters report cited in the industry coverage, Polymarket had secured that investment as part of a broader funding push. The timing showed how the company was moving from niche platform to a more heavily capitalized business with ambitions to operate inside the U.S. financial system.

Institutional money, however, can cut both ways. A large valuation increases pressure to prove durable revenue, comply with regulators and avoid reputational missteps. It also makes payment rails, banking partners and market infrastructure more important. A platform valued in the billions cannot operate as a fringe product if it wants to court public markets or major financial institutions.

Competition exposed operational and strategic risks

Polymarket’s growth has not been linear. The company recently recorded its first monthly decline in trading volume in eight months, with technical issues and increased competition from Kalshi blamed for the slowdown. As Inside Asian Gaming reported on Polymarket’s trading-volume decline, volume across its offshore exchange and U.S. app fell about 9% to US$10.3 billion in April, while Kalshi’s volume climbed 13% to US$14.8 billion.

Those figures showed that Polymarket’s brand strength did not insulate it from execution problems. The company said a delayed infrastructure upgrade contributed to the slowdown, while executives acknowledged outages, failed transactions and management challenges. For users trading around fast-moving sports or political events, reliability is central. A failed transaction can mean missing a price window entirely.

Kalshi’s rise also changed the competitive landscape. As a CFTC-regulated prediction market with a U.S. presence, Kalshi has pushed aggressively into products that overlap with sports betting and financial wagering. Its growth makes the regulatory battle more urgent because both companies are trying to define prediction markets before states, courts or federal agencies do it for them.

For banks, that uncertainty matters. High trading volumes can create substantial payment flows, fraud monitoring needs, chargeback risks and anti-money laundering obligations. If the legal status of some contracts remains contested, a bank may decide the revenue from servicing the client is not worth the regulatory exposure.

Marketing scrutiny added another layer

Polymarket has also faced questions about how it promoted its platform. A Wall Street Journal investigation, summarized in Inside Asian Gaming’s coverage of claims that Polymarket paid creators for staged promotional videos, alleged that creators produced videos simulating betting activity and winnings using replicas of the Polymarket website rather than the live platform.

The report said some creators initially did not disclose their paid relationship with Polymarket, though affiliations were later added to social media bios after journalistic inquiries. Polymarket said it was committed to accurate and transparent markets and would audit its marketing practices.

Such allegations are not peripheral for a prediction market. Trust in pricing, settlement and promotional claims is central to the product. If users believe markets are manipulated, marketing is misleading or winnings are exaggerated, the platform’s core proposition weakens. For regulators and banks, aggressive or opaque marketing can become evidence that a company is operating more like a gambling business than a financial exchange.

The Nevada setback reinforced that vulnerability. A state judge recently blocked Polymarket from operating there, reflecting concerns that its sports-related products should fall under gambling law. That ruling did not settle the national debate, but it signaled that states are willing to challenge the federal derivatives framework when prediction markets touch sports betting.

The payments problem is industrywide

Polymarket’s banking issue sits within a broader payments problem across wagering and gambling-adjacent businesses. Even licensed gambling operators face transaction declines, deposit limits, withdrawal caps and bank-imposed blocks. High-value customers often use multiple wallets, bank accounts and cards to move funds, creating friction for users and compliance burdens for operators.

That reality was central to Inside Asian Gaming’s interview with Edge Markets on a single-use Visa card for gambling. Edge Markets built a debit product designed only for gambling transactions, arguing that separating wagering funds from everyday spending could improve transparency and reduce bank friction. The company said it took nearly four years to navigate banking rules and obtain a Visa waiver because limiting a Visa card to one category ran against the network’s traditional model.

The comparison is instructive. Edge Markets pursued a narrow, compliance-led payments product for regulated gambling. Polymarket is pursuing broader event-market scale while its regulatory classification remains contested. Both models depend on banks and payment networks being comfortable with the underlying activity.

Meanwhile, legal online casinos continue to grow quickly in states where they are expressly permitted. In October 2025, all seven U.S. igaming states set revenue records, with total revenue reaching US$907.4 million, according to Inside Asian Gaming’s U.S. igaming revenue report. That growth shows there is no shortage of consumer demand for online wagering products when the regulatory path is clear.

Polymarket’s challenge is different. It must convince regulators, banks, investors and users that prediction markets can scale as legitimate financial infrastructure rather than unlicensed betting. JPMorgan’s reported retreat shows that even as valuations climb and trading volumes surge, access to the banking system remains one of the most important tests of that argument.