Prediction markets are an increasingly big business, and Wall Street wants in on the action.
Intercontinental Exchange, the owner of the New York Stock Exchange, said on Tuesday that it plans to invest up to $2 billion in Polymarket, a crypto-powered betting site.
The deal values Polymarket, one of the biggest prediction market operators, at about $8 billion, up sharply from the $1 billion valuation the company fetched in its last fund-raising round, in August.
The deal “marks a major step in bringing prediction markets into the financial mainstream,” Shayne Coplan, Polymarket’s founder and chief executive, said in a statement.
Prediction markets allow users to bet on the outcome of a wide range of events. Though such markets have existed for years, it wasn’t until last year — when they garnered attention for correctly predicting the outcome of the presidential race — that they broke through to the mainstream.
Polymarket drew extra scrutiny for the presence of a pseudonymous French trader who bet tens of millions of dollars on a Trump victory.
Though prediction markets gained prominence because of the political bets, bettors can wager on N.F.L. games, the chart performance of Taylor Swift songs and more.
Indeed, sports betting has recently fueled a growth spurt for these companies. When Kalshi, a Polymarket rival, said last week that it would offer complex parlay bets that are traditionally the domain of bookmakers, it caused shares in online betting operators to tumble.
Prediction markets also have grown as operators have expanded access to their platforms. Kalshi has struck deals with online brokerages, including Robinhood and Webull, that essentially allow customers to wager on betting contracts as easily as trading stocks.
Wider distribution appears to be a driving factor in Polymarket’s latest deal: Intercontinental Exchange will become a global distributor of the prediction market operator’s data.
Polymarket has also sought to capitalize on the Trump administration’s looser approach to regulation.
In July, federal prosecutors closed an investigation into Mr. Coplan that began in the final days of the Biden administration. And the heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission have suggested that they’re willing to give more leeway to “innovators that want to list event contracts on prediction markets responsibly.”
In August, Polymarket announced that Donald Trump Jr., the president’s eldest son, had invested in the company through 1789 Capital, a financial firm in which he is a partner, and joined its advisory board. (Mr. Trump is also an adviser to Kalshi.)
The company agreed to bar American investors from its platform in 2022, as part of a settlement with the C.F.T.C, and is now seeking to do business again in the United States. In July, it acquired a small derivatives exchange and clearinghouse to regain entry in the country.
Michael J. de la Merced has covered global business and finance news for The Times since 2006.
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