Polymarket Adds California Sports Betting Futures, Trading Banned in US

Posted on: September 20, 2022, 08:59h. 

Last updated on: September 21, 2022, 02:17h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

California’s sports betting propositions are now available on a futures trading site. However, if you’re in the US, you’re barred from participating in the market.

California sports betting
Screen caps of ads and websites for the four groups set up to either support or oppose the two California sports betting initiatives that will appear on the Nov. 8 ballot. Polymarkets on Tuesday opened futures trading markets on the outcome of the votes for Props 26 and 27. But trading is prohibited in the US. (Image: Casino.org)

Polymarket launched markets on Tuesday afternoon for California’s Proposition 26 and Proposition 27. Polymarket is like a PredictIt-Kalshi hybrid in that it offers trading on the outcomes of political events, like elections, as well as the outcomes of economic, weather, and other events.

It had been operating in the States. But on Jan. 3, Polymarket agreed to pay a $1.4 million fine to the Commodity Futures Trading Commission (CFTC) for offering two-way options contracts without getting the commission’s approval. Later that same month, Polymarket announced it would block US traders from using the site.

Polymarket lists several trading markets tied to sporting events, which CFTC regulations currently prohibit.

PredictIt would seemingly be a place for US traders for such a market on the California sports betting measures. However, the CFTC pulled PredictIt’s “No-Action” letter last month and ordered the exchange to end operations by February. While PredictIt has filed a lawsuit to block the CFTC’s action, officials with the exchange are not offering any new trading opportunities.

Prop 26 v. Prop 27

The sportsbooks, tribal nations, and cardrooms have spent more than $412 million combined to get their messages out about the measures. With seven weeks before the election, it’s become an increasingly hostile contest between the sides and their supporters.

In a poll released last week, 54% of likely voters said they planned to vote no on Prop 27. Only 34% said they planned to vote yes. The independent survey conducted by the Public Policy Institute of California did not include questions on Prop 26.

Prop 26 would legalize retail sportsbooks at tribal casinos and the state’s four thoroughbred racetracks. There are also some non-sports betting provisions, such as allowing tribal casinos to offer dice-based table games and roulette. There’s also language that would allow tribal nations and other entities to take organizations to court if they believe they’re conducting illegal gaming operations. The cardroom casinos believe that provision targets them and could lead to some closing.

Prop 27 would legalize online sports betting statewide. Backed by seven national sports betting operators, the measure calls for commercial sports betting revenues to be taxed at 10%, with 85% of those proceeds going to fund initiatives for mental health services and the homeless. The remainder would go toward an economic development fund for non-gaming tribes.

Traders Backing No on Both

Early on, traders at Polymarket are not optimistic about either measure’s chances of success.

Shares for No on Prop 26 are trading at 81 cents, with Yes selling at 19 cents each. On Prop 27, it’s currently 65 cents for No and 35 cents for yes.

Polymarket pays out the winning side’s shares at $1 each like other exchanges.