U.S. Wallets Traded $571 Million on Polymarket Political Bets Despite Official Ban
Table of Contents
You might want to know
How much political betting activity tied to the United States actually occurs on Polymarket despite an official U.S. ban?
What kinds of political events are U.S.-linked wallets most likely to bet on, and what does that imply for regulators?
Main Topic
On-chain analysis shows that wallets linked to the United States executed roughly $571 million in notional trades on Polymarket political markets over the past 12 months, making the U.S. the single largest national source of political betting volume on the platform during that period. This figure exceeds activity from other jurisdictions, including Hong Kong, which logged approximately $422 million in the same timeframe. The analysis comes from an on-chain analytics firm that tags wallets to countries based on blockchain behavior rather than relying on connection-level data.
Polymarket formally blocks users connecting from U.S. IP addresses because it lacks the legal clearance to offer its services to U.S. residents. However, the platform operates on decentralized crypto infrastructure — wallets and stablecoins — that bypass traditional financial intermediaries. Because transactions occur on-chain and do not require traditional bank or broker flows, there is no centralized account or counterparty for a regulator to deny service to, and minimal friction for users who employ VPNs and existing crypto wallets. The analytics firm notes that while IP-based blocks might stop some direct connections, they do not prevent U.S.-linked wallets from participating in markets that are visible on-chain.
It is important to treat the country-tagged results as directional rather than exact. The firm can confidently attribute only a minority of political-market wallets (about 6%) to specific countries using on-chain signals, so the $571 million figure should be read as an informed estimate rather than an exact census. Nevertheless, the distribution and scale of the activity suggest a meaningful trend: blocking by IP address appears to reduce friction but does not eliminate participation by users with U.S. ties.
The composition of bets placed by U.S.-linked wallets also diverges from the platform-wide mix. U.S. traders showed a pronounced preference for geopolitics and foreign-conflict events: geopolitics represented roughly 46% of the notional volume tied to U.S. wallets, compared with about 36% for the platform overall. In contrast, elections accounted for only 16% of U.S. wallet volume versus 32% platform-wide. This indicates that American participants disproportionately gravitate toward markets on foreign wars, regime changes, ceasefires and other geopolitical outcomes rather than the election markets that many other users favor.
Examples underscore this tilt. Among the twelve largest markets by U.S.-linked participation, five concerned the Iran conflict, and one of the single largest markets was a novelty event — whether Ukrainian President Volodymyr Zelenskyy would wear a suit — which attracted roughly $20.8 million in notional volume. Many of these types of markets are typically not listed by regulated U.S. venues, which tend to focus on economic indicators, rate decisions and domestic political events. As a result, demand that cannot be satisfied by compliant, onshore operators migrates to offshore or crypto-native platforms that list a broader set of geopolitical and unconventional markets.
Despite their heavier exposure to geopolitics and occasional larger bets, U.S.-linked wallets do not appear to enjoy a predictive advantage. For resolved markets, U.S. wallets backed the winning outcome about 81.9% of the time compared with roughly 80.3% for non-U.S. wallets — effectively no statistically meaningful edge. Aggregate returns if positions were held through resolution were also nearly identical between U.S. and non-U.S. participants. In short, although U.S.-linked traders sometimes placed bolder stakes — at one point allocating 53% of their volume to the possibility of a U.S. invasion of Iran while the broader market placed 26% — their accuracy and realized returns mirrored those of other traders.
The broader policy implication is a classic regulatory dilemma: blocking access based on location does not necessarily stop participation, and a substantial political betting market can persist beyond the effective reach of domestic oversight when it migrates to on-chain platforms. That migration may shift the most contentious or sensitive categories of wagering offshore — precisely the categories regulated venues would likely avoid — while leaving regulators with limited tools to monitor or interdict activity that is visible on public ledgers but executed through decentralized flows and self-custodied wallets.
This key insight significantly impacts the understanding of regulatory effectiveness: IP blocks and venue-level restrictions can redirect demand rather than suppress it, concentrating activity on platforms and markets outside conventional supervisory frameworks.
Key Insights Table
| Aspect | Description |
|---|---|
| Estimated U.S. volume | Approximately $571 million in notional political-market trades by wallets tied to the U.S. over 12 months. |
| Primary focus of U.S. wallets | Disproportionate betting on geopolitics and foreign conflicts (46% of U.S. volume) versus elections (16%). |
| Platform access control | Polymarket blocks U.S. IP addresses, but crypto rails and VPNs enable continued participation via on-chain wallets. |
| Attribution caveat | Country tags are based on on-chain behavior and reliably attribute only a subset (~6%) of political-market wallets; figures are directional. |
| Predictive performance | U.S.-linked wallets won resolved markets at rates similar to others (≈81.9% vs. 80.3%), showing no clear edge. |
Afterwards...
Looking ahead, policymakers and technologists should consider several avenues to better understand and, where appropriate, address offshore political betting activity that migrates to blockchain-based platforms. Enhanced on-chain analytics and attribution techniques can improve visibility into cross-border flows without compromising privacy norms. At the same time, regulators may need to clarify whether and how existing statutes apply to prediction markets operating over decentralized infrastructure, and whether new frameworks — international cooperation, targeted enforcement, or regulated onshore alternatives — are necessary to address risks tied to market integrity, gambling laws and national security concerns.
Industry participants and researchers should also further explore technical measures that balance compliance with user sovereignty, such as interoperable identity and compliance primitives that work with self-custody, or voluntarily compliant market offerings that satisfy both consumer demand and regulatory standards. Finally, continued monitoring of market composition and participant behavior will be critical: the tilt of U.S. demand toward geopolitics suggests specific societally sensitive areas where oversight or public-interest analysis may be most warranted.
In sum, the persistence of significant U.S.-linked activity on offshore, on-chain political markets highlights the limits of simple access blocks and underscores the need for nuanced, coordinated approaches that combine better data, clearer policy, and pragmatic technical solutions. These are the areas where further research and policy development could have the most impact.