Kalshi and Polymarket’s effort to sell sports wagers as financial products is meeting resistance overseas. Dan Bernstein reports that their American strategy depends on federal financial oversight displacing state gambling rules and taxes. Other countries have their own authority to classify the same bets, and several have restricted access.
Kalshi has withdrawn from China, India, Brazil and Nigeria, according to Sportico. Brazil forced it offline in April. Australia directed internet providers to block Polymarket last year for providing a prohibited interactive gambling service. Polymarket and a technology partner also paid more than $200,000 in an Ontario settlement over a ban on binary options, contracts with two possible outcomes. These are different legal regimes, but American regulatory approval supplies no exemption from them.
The classification dispute has practical consequences for who oversees the business and collects its taxes. Kalshi and Polymarket argue that they provide financial services while fighting American challenges to that position. Bernstein reports that seeking overseas gambling licences would sit awkwardly beside that argument. Rival exchange operators, including Matchbook, are willing to accept gambling regulation abroad while applying for financial-market approval in the United States.
Sportico also describes the imbalance between professional traders and ordinary sports fans. Traders said Mexico’s World Cup loss to England brought opportunities to profit when bets on Mexico drifted away from their models’ probabilities. Their suggestion that Mexico-based fans drove the movement is unverified; American fans could also explain it. Neither company’s disclosures establish how much activity actually comes from overseas.
For American readers, the comparison makes the stakes of the regulatory fight concrete. Calling an event contract a financial product changes the rules surrounding the wager, including the role of state gambling authorities. It leaves the customer’s money exposed to the outcome and to better-informed counterparties. Bernstein’s reporting documents restrictions and conflicting classifications, rather than measuring addiction or household losses. Kalshi declined to comment on the record, and Polymarket did not respond.