The prediction market landscape is more complex than it appears. Depending on where a platform operates, the rules, protections, and accessibility for users can vary drastically.

There are many differences between offshore and onshore prediction markets, but most of those differences can be tied to the fact that onshore prediction markets are regulated by the Commodity Futures Trading Commission (CFTC) and offshore are not.

Offshore vs Onshore prediction markets comparison across 9 regulatory and operational topics.
Market structure

Offshore vs. Onshore

A side-by-side look at oversight, access, protections, privacy, and participant reach.

Comparing Topic
Market type Offshore
Market type Onshore
U.S. Regulatory Oversight
None
CFTC & DOJ
Issuer Data Reporting
No
Yes
Market Variety
Broad
Limited
Consumer Protection Requirements
Platform discretion
Yes
Limitations on Event Contract Types
No
Yes
Onboarding Process
Faster
Slower, stricter eligibility
Anti-Money Laundering Procedures
Platform discretion
Yes
User Privacy
Higher
Lower
Variety of Participants
Global U.S. largely excluded
U.S. based Primarily domestic
Detailed explainer covering onshore and offshore prediction market structures, regulation, and tradeoffs.
U.S.-regulated
Onshore Markets
CFTC-registered & DCM-licensed

U.S.-based prediction markets must register with the CFTC and obtain a Designated Contract Market (DCM) license to offer event contracts β€” a high bar with currently only 25 registered DCMs.

Once approved, platforms must comply with 23 Core Principles β€” including identity verification, fraud monitoring, and market integrity safeguards. The CFTC’s Division of Market Oversight conducts regular Rule Enforcement Reviews (RERs) of each DCM.

The Commodity Exchange Act restricts contract types: events touching war, assassination, terrorism, gaming, or matters deemed against public interest are prohibited.

Regulated platforms must impose stricter user eligibility and collect personal data β€” reducing anonymity in exchange for stronger protections.
Unregulated
Offshore Markets
No U.S. regulatory oversight

Offshore platforms operate outside U.S. regulatory requirements. Most do not verify identities or collect user data, offering greater privacy and a broader range of contracts to a global user base.

Many run on blockchain-enabled infrastructure β€” making all trade timing and sizing permanently, publicly recorded via an immutable ledger. Users, not platforms, typically create the markets themselves.

Faster onboarding and fewer compliance barriers make entry easier β€” but these platforms use geofencing and terms of service to block U.S. users from accessing their markets.

Greater flexibility and privacy come without the consumer protections or regulatory recourse available to onshore participants.
Accessibility & Tradeoffs

Onshore markets are available to U.S. users and deliver stronger consumer protections and regulatory oversight β€” at the cost of higher compliance burdens and operational constraints. Offshore markets ban U.S. users entirely, offering greater flexibility and accessibility but carrying elevated risk due to the absence of regulatory protections.

In the context of U.S. users and federal oversight, only onshore markets are currently available β€” and those markets operate under a strict regulatory regime.

If you have any questions, please reach out toβ€―policy@digitalchamber.org.