Wall Street’s interest in alternative trading platforms is expanding rapidly, with one of its largest institutions diving headfirst into the world of prediction markets. Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange, revealed it will invest $2 billion in Polymarket, a blockchain-powered prediction market operator. The announcement sent ripples through the gambling and gaming industries, according to Investor’s Business Daily, triggering a selloff among sportsbook stocks including DraftKings and FanDuel’s parent company, Flutter Entertainment.
The $2 billion injection places Polymarket’s valuation in the $8 billion to $10 billion range, marking a massive leap for a company founded just five years ago. Polymarket, established in 2020, enables users to wager on yes-or-no questions tied to real-world outcomes—whether political events, sports results, or major economic developments.
Despite being privately held, the company has attracted an impressive list of investors. Its backers include Founders Fund, led by venture capitalist Peter Thiel; 1789 Capital, a fund linked to Donald Trump Jr.; and Ethereum cofounder Vitalik Buterin. In August, Trump Jr. joined Polymarket’s advisory board following his firm’s investment in the company, further fueling attention around the platform’s growing influence.
A Comeback to the U.S. Market
Polymarket’s reemergence in the United States has been a long time coming. In 2022, the platform was barred from serving U.S. users after a settlement with the Commodity Futures Trading Commission (CFTC) under the Biden administration. The company agreed to pay penalties and restrict access to U.S. participants while it worked to comply with regulations.
However, recent developments suggest a turnaround. In July, both the CFTC and the Department of Justice reportedly concluded their investigations into the company, clearing the way for its return. CEO Shayne Coplan celebrated the milestone in a post on social media, stating that “Polymarket has been given the green light to go live in the USA by the CFTC.” As part of its U.S. comeback plan, Polymarket acquired a licensed American exchange and clearinghouse—an important step toward operating within regulatory frameworks.
Market Reaction: Sportsbooks Under Pressure
While the deal marked a milestone for ICE, it wasn’t good news for traditional betting operators. ICE shares rose 1.8% on Tuesday following the announcement, bringing its year-to-date gains to nearly 9%. However, DraftKings and Flutter Entertainment were not as fortunate. DraftKings’ stock slid 5.8%, continuing its decline below the 200-day moving average, while Flutter dropped 3.7%, also slipping under key technical levels.
The downturn for sportsbook giants builds on a challenging few weeks. Earlier in October, similar declines followed moves by prediction market competitors Kalshi and Robinhood. On September 29, Kalshi unveiled new parlay-style offerings—bet combinations similar to those favored by traditional sportsbooks—just before the NFL’s “Monday Night Football.” That same day, Robinhood CEO Vladimir Tenev revealed in a social media post that users had completed over 4 billion event contracts this year, with half occurring in the third quarter alone. Robinhood’s prediction market, launched in March through a collaboration with Kalshi, has quickly grown into one of the largest in the space.
The Broader Competitive Landscape
The rising prominence of prediction markets like Polymarket and Kalshi signals an evolving challenge for established sportsbooks. Investors are watching closely as these blockchain-based exchanges offer users a decentralized way to speculate on real-world outcomes, often with fewer restrictions and broader categories than traditional betting sites.
Meanwhile, DraftKings’ stock is down 11.4% for the year, underscoring investor unease about competition from these newer entrants. Flutter, though still up 16% in 2025, has also seen mounting pressure as regulatory shifts and emerging platforms disrupt the sports betting landscape.
As ICE deepens its exposure to prediction markets through Polymarket, the financial world appears to be taking sides in a broader reshaping of how people bet, trade, and speculate. While Wall Street sees opportunity, sportsbook operators are bracing for a new era where their dominance could face an unexpected challenge—from the very markets they once dismissed as niche.
