Entertainment predictions are booming, but Polymarket is being targeted by an old law
On January 14, according to FT reports, the decentralized prediction market platform Polymarket recently attracted widespread attention for sponsoring the Golden Globe Awards, and its business model has once again been brought into the spotlight of US regulatory law. On the surface, this appears to be a crossover collaboration between the entertainment industry and crypto prediction markets, but behind the scenes, it involves a complex regulatory history traceable back to the 1958 Onion Futures Act.
During this year’s Golden Globe Awards, Polymarket frequently appeared in live broadcasts and pre-show programs as the “exclusive prediction market partner,” guiding viewers to participate in predicting award outcomes. From Best Picture to sensitive words mentioned at the awards ceremony, related contracts attracted tens of thousands of dollars in participation, further amplifying the platform’s influence.
The core issue is not the prediction of awards itself. Under current US law, prediction contracts related to event outcomes are not explicitly prohibited. However, multiple independent contracts linked to movie box office revenue appeared on Polymarket’s website, which led some industry insiders to recall the 2010 revision of the Onion Futures Act. This amendment explicitly bans any derivatives trading based on movie box office revenue or related indices, with the legislative intent to prevent market manipulation and industry distortion.
The origin of this law can be traced back to the onion futures market manipulation scandal in the 1950s. At that time, Vincent Kosuga manipulated the market by controlling spot supply and shorting futures, causing onion prices to collapse, which ultimately led Congress to pass legislation banning onion futures trading altogether. For decades thereafter, onions remained the only commodity in the US to be fully prohibited from futures trading.
So, how does Polymarket bypass this regulatory barrier? The answer lies in the platform’s “geographical layering” strategy. Its US-facing version is regulated by the US Commodity Futures Trading Commission and has limited functionality; meanwhile, contracts related to movie box office predictions only appear on overseas platforms targeting non-US users. As early as 2022, Polymarket was required to exit some US markets and pay fines due to compliance issues.
Legal experts point out that as long as US users cannot participate in these markets, the platform remains on the “gray area” of compliance in form. However, if there are regulatory penetrations or access loopholes, risks cannot be ignored. Overall, Polymarket’s expansion into entertainment predictions is precisely treading on the most sensitive red line of US financial regulation history, and its future direction remains uncertain until regulatory attitudes become clearer.