PrizePicks and Polymarket Form Alliance for Federal Event Contracts
PrizePicks has entered a multi-year agreement with Polymarket. The partnership’s goal is to integrate Polymarket’s event contracts into the PrizePicks application as Polymarket re-enters the US market. This would allow PrizePicks to offer federally regulated derivative contracts, positioning the platform for nationwide expansion and increased stability under federal oversight.
Strategy Shifts to Federal Regulation
The new partnership is a strategic change for PrizePicks, moving the company toward products regulated by the Commodity Futures Trading Commission (CFTC).
This approach provides an alternative to the state-level regulatory battles often faced by “Pick’Em” style games. PrizePicks is currently the only sports entertainment operator registered as a Futures Commission Merchant (FCM) with the National Futures Association (NFA). This is crucial, enabling PrizePicks to legally offer CFTC-sanctioned derivative products through partnerships with federally regulated exchanges, such as Polymarket.
PrizePicks CEO Mike Ybarra stated the move “compliments our business very well” and allows the platform to expand its customer base and enter new states like Washington. The shift is viewed as creating a more highly regulated business model compared to competitors.
Polymarket Returns to the US Arena
The alliance is key to Polymarket’s re-entry into the US market after pausing operations domestically in 2022 due to regulatory issues. Polymarket recently secured its path back by acquiring QCEX, a federally regulated derivatives exchange and clearinghouse.
Polymarket Founder and CEO Shayne Coplan commented on the partnership, highlighting the potential for prediction markets to boost fan engagement. “This partnership shows how prediction markets can enhance fandom while setting a new standard for interactive, regulated sports engagement,” Coplan said.
Product Innovation and Peer-to-Peer Trading
The integrated contracts will cover a broad spectrum of markets, including sports, entertainment, and cultural events. While sports remain the highest priority, PrizePicks plans to offer entertainment in the broadest sense, including music, movies, and boxing matches. Ybarra noted the platform will curate available contracts to ensure fairness for participants.
Ybarra also emphasized the fundamental difference between prediction markets and traditional sports betting. Traditional sports betting involves players competing against the house, which sets the odds and profits. Prediction markets, however, operate on a peer-to-peer model driven by supply and demand. “There is no against the house market there,” Ybarra explained.
This structure, according to Ybarra, offers a crucial distinction for customers and regulators. The relaunch of the event contracts on the PrizePicks app is expected to coincide with Polymarket’s US return, possibly within the current football season.
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