Polymarket Pushes for Margin Trading as Wall Street Pulls Back
In a major escalation of the prediction market arms race, Polymarket has filed for a US license to offer margin trading. The July 10 filing would allow users to open positions without posting full collateral, a direct competitive response following Kalshi's recent launch of FCM-backed perpetuals.
However, as platforms expand their financial products, traditional finance is erecting internal barriers. Major Wall Street banks, specifically Goldman Sachs and Morgan Stanley, have implemented new restrictions on employee prediction market trades. The institutional crackdown stems from growing insider trading fears spreading across both Polymarket and Kalshi.
State-Level Regulatory Fractures: North Carolina vs. New York
The regulatory landscape for prediction markets continues to fracture at the state level. In a significant win for the industry, a new North Carolina budget law officially recognizes the Commodity Futures Trading Commission's (CFTC) federal regulatory authority over platforms like Kalshi and Polymarket. The legislation also establishes a highly favorable 6% tax rate, which is notably lower than what other states are currently pursuing.
Conversely, Kalshi is facing steep resistance in New York. On July 8, the platform filed a same-day appeal to the Second Circuit after a New York federal judge denied its request to block state gambling officials from enforcing local laws against its sports event contracts. Traders navigating these complex jurisdictional shifts can utilize predictionmarketstools.com to track platform availability and aggregated market data.
Polymarket Faces User Lawsuit Over Market Resolution
Beyond regulatory hurdles, platform operators are facing direct legal challenges from their user base. Traders William Wood and Thomas Bush have filed a lawsuit in the Supreme Court of the State of New York against Polymarket, its holding entities, and CEO Shayne Coplan. The complaint alleges that the prediction market platform wrongly resolved a specific market regarding whether "Strategy" would sell Bitcoin.