Explainer pieces trace how Kalshi and Polymarket prediction markets operate
Three explainer articles published on the same day mapped the structural mechanics of leading US prediction-market platforms. Kalshi operates as a Commodity Futures Trading Commission (CFTC)-registered designated contract market (DCM) with its own exchange infrastructure and published fee curve. Polymarket US runs as a separate CFTC-regulated designated contract market through QCX LLC. DraftKings Predictions functions as a futures broker distributing Chicago Mercantile Exchange (CME) contracts rather than operating its own exchange. The pieces highlight a split between platforms building proprietary regulated infrastructure and those partnering with or white-labeling through existing venues.
Regulators, traders, and new entrants need a clear map of who actually controls the rails. Kalshi and Polymarket each run their own CFTC-registered exchanges. DraftKings Predictions does not; it relies on CME-listed products. That distinction shapes compliance risk. A platform with its own exchange license faces direct CFTC supervision and state preemption fights, as Kalshi is losing in Ohio and Tennessee.
A broker distributing exchange-traded products delegates much of that burden upstream but surrenders pricing power and product flexibility. The swap-rule proposal the CFTC is now advancing could reclassify event contracts as swaps. Any platform without its own clearing and margin infrastructure would struggle to adapt. New entrants like Blockchain.com are filing for direct CFTC licenses rather than partner models, betting that owning the stack reduces redesign risk.