Americans Bet $571 Million on Polymarket’s Political Markets Despite U.S. Ban

Even though Polymarket blocks U.S. users by IP address, American crypto wallets traded a staggering $571 million in political contracts over the past twelve months – more than any other nation. The volume, uncovered by on‑chain analytics firm Allium, reveals a paradox: a platform that legally cannot serve U.S. customers is nonetheless its biggest political‑betting crowd.

Allium’s methodology tags wallets to countries based on transaction patterns rather than IP data, exposing a loophole that VPNs and crypto wallets easily exploit. Only about 6 % of Polymarket’s political‑market wallets could be confidently assigned to a country, so the $571 million figure is directional, not exact, yet it is large enough to merit attention.

The American betting profile is strikingly different from the global average. U.S. participants allocated 46 % of their notional to geopolitics – wars, ceasefires, regime‑change events – while elections comprised just 16 %. By contrast, the platform overall saw 36 % in geopolitics and 32 % in elections. Five of the twelve biggest U.S. markets involved the Iran‑Ukraine conflict, and the single largest bet – $20.8 million – was a novelty question on whether Ukrainian President Volodymyr Zelenskyy would wear a suit.

These markets are precisely the ones that U.S.-regulated venues such as Kalshi and Polymarket’s compliant arm avoid, focusing instead on economic data, rate decisions and election outcomes. The offshore demand therefore highlights a market segment that existing U.S. infrastructure does not capture, prompting regulators to ask whether they should bring such contracts onshore or simply leave them outside the jurisdiction.

Performance data offers little justification for the risk‑taking. On resolved contracts, U.S. wallets backed winners 81.9 % of the time, only marginally above the 80.3 % success rate of the broader market. Returns were virtually identical, indicating that the higher stakes do not translate into a predictive edge.

Institutional players are watching. Kalshi, a CFTC‑registered exchange, has recently expanded its product suite to include more political outcomes, but it remains constrained by U.S. securities law. The offshore surge could pressure such platforms to broaden their offerings, or conversely, to lobby for stricter enforcement of geographic blocks.

The situation also mirrors the broader sports‑betting landscape. While the NFL’s betting market is tightly regulated and integrated with state‑licensed operators, political betting on Polymarket operates in a legal gray zone, underscoring how regulatory frameworks can diverge dramatically across verticals.

For policymakers, the key question is whether the current IP‑based blocking model is sufficient. Crypto’s borderless nature means that a simple VPN can bypass location checks, and stablecoin payments leave no traditional banking trail. A more robust approach might involve on‑chain identity verification or a licensing regime that brings offshore markets under U.S. oversight, thereby protecting consumers without stifling innovation.

In the meantime, U.S. traders continue to place bold bets on foreign conflicts, a behavior that could influence public perception and, indirectly, foreign‑policy discourse. The data suggests that the ban has not curbed demand; it has merely shifted it to a less transparent arena.