Polymarket recruits internal market making team
Predictions platform Polymarket has begun recruiting for an internal market making team following its relaunch in the US earlier this week.
According to Bloomberg, the team will trade against customers on its platform, creating liquidity and taking the other side of bets.
The platform currently relies on users to take the less likely outcome on its yes or no bets, but the new team’s role would be to take on the less popular trades to create liquidity for the market.
Its competitor, Kalshi, operates a similar team, called Kalshi Trading, which has attracted controversy, as some claim it creates conflicts of interest and makes the platform appear more like a traditional sportsbook.
Kalshi argues that the unit is there to generate liquidity in markets and improve customer experiences.
A recent class action lawsuit was filed against Kalshi in New York, claiming the platform misleads customers and operates as a traditional sportsbook due to its market making activities.
Polymarket recently reopened in the US after receiving Commodity Futures Trading Commission approval. The platform was banned from the US in 2022 and had to pay a US$1.4 million penalty.
In November, Polymarket and Kalshi reached a record US$10 billion in trading volume, which was defined by growth in retail activity, deeper platform integrations, and a steady stream of news.
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The Backstory
Why Liquidity Is the Next Battleground
Polymarket’s move to stand up an internal market making team comes as prediction markets cross into mainstream finance and sports entertainment. Liquidity is the friction point. These platforms run on yes-no event contracts whose prices mirror collective odds. When one side of a market lacks buyers, spreads widen and casual users drop off. That puts a premium on dedicated counterparties willing to take unpopular sides and quote two-way prices through news cycles.
Kalshi has long acknowledged this dynamic with a proprietary market-making unit. The approach invites governance questions about conflicts but addresses a core product problem: depth and execution quality in fast-moving markets. Polymarket’s plan signals the industry’s next phase, where platforms tighten control over user experience while navigating regulatory scrutiny over what looks, at scale, like a sportsbook’s mechanics.
The backdrop is a flurry of deals, regulatory maneuvers and record usage that have set the stage for a liquidity arms race. The question is whether building internal trading desks will accelerate adoption or sharpen scrutiny from state and federal watchdogs already uneasy with how event contracts are marketed and licensed.
Scale Up: Record Volumes and a Two-Player Squeeze
November marked an inflection point. Kalshi and Polymarket together posted an all-time high of about $10 billion in monthly trading volume, driven by retail flows, deeper integrations and a steady run of tradable headlines. Kalshi jumped from $4.4 billion in October to $5.8 billion in November, while Polymarket climbed to more than $3.7 billion, a roughly 23.8% increase month over month, according to reporting on the record $10 billion month.
The surge has concentrated market share. Analysts describe an emerging duopoly in event contracts, underscored by fresh capital and large distribution partnerships. Kalshi’s reported $1 billion round that doubled its valuation to $11 billion and Polymarket’s push into integrations with Yahoo and Google Finance signal a race to build pipes, not just products. Liquidity provision is the linchpin for converting that reach into stickier activity — the piece market makers are built to solve.
Licensing Latitude Meets Sports Pushback
Access and brand legitimacy are now central to growth. The National Hockey League signed multi-year partnerships with both platforms, granting data rights and brand usage. The NHL said the deals would power engagement across regular-season broadcasts, the Stanley Cup Playoffs, the Winter Classic and the Stadium Series. The announcement framed Kalshi and Polymarket as category leaders in a rapidly evolving sector. Details are in the league tie-up coverage: the NHL’s deals with Kalshi and Polymarket.
The reaction underscored the stakes. The American Gaming Association told ESPN the moves were “deeply concerning,” arguing that federally licensed prediction markets are operating outside state gambling regimes that bind sportsbooks. Nevada regulators followed with a notice to licensees that event contracts are treated like traditional sports wagers in the state and can be offered only by nonrestricted licensees with sports pool approval, according to the NHL partnership report. The message: federal permissions do not erase state-level constraints.
This is the regulatory fault line that internal market making could widen. The more these platforms resemble sportsbooks in pricing, branding and user flow, the more pressure states may apply. Yet the same features are what retail users expect for reliability and fairness. That tension sits at the center of Polymarket’s latest move.
Regulatory Whiplash on the Road Back to the U.S.
Polymarket’s U.S. reentry has been a stop-start saga. The company settled with the Commodity Futures Trading Commission in 2022 and paid a $1.4 million penalty, then pursued a compliant path by acquiring a regulated exchange and clearinghouse and self-certifying certain contracts. But a federal government shutdown stalled the process after a filing timed to take effect if the CFTC did not object within one business day. That window never closed. The delay is detailed in coverage of how a shutdown pushed back Polymarket’s return.
Despite the setback, the firm maintained global operations across roughly 180 countries and kept U.S. launch plans warm. The licensing route reflects a strategic bet that federal oversight via the CFTC offers a clearer, scalable path than threading state-by-state sportsbook approvals. It also raises the stakes: any operational choice that looks like bookmaking — including a house-affiliated market maker — could invite fresh challenges from state regulators and competitors.
Distribution Plays: X and PrizePicks Partnerships
Polymarket has paired compliance work with reach. It became X’s official prediction market partner and plans an integrated product blending event probabilities with real-time feeds and AI analysis from Grok. The company positions this as a way to push actionable signals to broad audiences, deepening liquidity around moments when attention spikes. The strategy is outlined in the partnership announcement on becoming X’s official prediction market partner.
Polymarket also struck a multi-year deal with PrizePicks, the top U.S. daily fantasy operator by users, to bring event contracts inside the fantasy app. The move complements PrizePicks’ registration as a Futures Commission Merchant with the National Futures Association, enabling it to intermediate derivatives through federally regulated exchanges. That creates a regulated commerce rail for prediction markets to reach millions of existing sports users without building a state sportsbook footprint. See the details on Polymarket’s partnership with PrizePicks.
Together with the NHL agreements, these deals provide content, distribution and legitimacy. They also increase the need for reliable two-way markets at scale, reinforcing why an internal desk could be pivotal for execution quality and user retention when volumes surge.
What the Market Maker Means From Here
Polymarket’s in-house market maker would formalize a role that third parties and power users have filled to date. The benefits are tangible: narrower spreads, faster quotes and fewer failed matches when sentiment is lopsided. The trade-offs are governance and optics. Oversight structures, transparency around risk limits and separations between listing, surveillance and trading functions will matter. So will how the firm communicates about when and how the desk participates.
The broader context is a sector pushing into the mainstream as a real-time sentiment engine for politics, sports and macro events. Platforms are building distribution, brand partnerships and capital while regulators map the boundary between federally supervised event contracts and state-governed wagering. As Kalshi and Polymarket consolidate share, their design choices — including whether to internalize liquidity — will shape whether prediction markets evolve like regulated exchanges, app-first sportsbooks or a hybrid.
The next tests are imminent. More league partnerships, election cycles and economic releases will stress liquidity. State and federal regulators will watch how these businesses market to retail and manage conflicts. And users will vote with their clicks for price quality and speed. In that calculus, a house-run market maker is not just a trading desk. It is a statement about how this industry intends to scale.
