Polymarket is technically not available to US residents — users must agree that they are not located in the US during signup. In practice, many US users access it via VPN. In 2022, Polymarket paid a $1.4 million settlement to the CFTC for operating an unregistered prediction market platform in the US. The regulatory status of prediction markets in the US remains unsettled; Kalshi and others have pursued legal US operation through CFTC regulation.
What happens if you lose on Polymarket?
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Losing on Polymarket means your USDC (crypto dollars) are transferred to winning position holders when the market resolves. Markets resolve via Polymarket's UMA oracle system — a decentralized dispute resolution mechanism. There is no recourse if you disagree with a resolution; the UMA system's ruling is final. Unlike traditional bookmakers, there is no 'sportsbook' taking the other side — you are betting against other users.
How does Polymarket make money?
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Polymarket takes a 2% fee on winnings at market resolution. There are no spread or vig charges on the odds themselves — prices are set by the market (other traders). This fee structure means Polymarket is cheaper than traditional sportsbooks on most markets, which is why sophisticated bettors use it for information extraction and arbitrage. The trade-off is lower liquidity on niche markets and the regulatory uncertainty for US users.
