The Gemini Space Station crypto exchange, owned by the Winklevoss brothers, has been granted permission to offer prediction markets by the Commodity Futures Trading Commission (CFTC). The company finally secured a Designated Contract Market (DCM) license five years after initially lodging an application.
It means the exchange will be able to offer yes/no markets on defined, verifiable outcomes. It has stated it has further plans to provide crypto futures, options, and perpetual contracts. Gemini said U.S. customers will be permitted to trade dollar-denominated event contracts through their web-based accounts, with mobile access to follow shortly.
In a statement, CEO Tyler Winklevoss said: “Today’s approval marks the culmination of a 5-year licensing process and the beginning of a new chapter for Gemini.” President of Gemini and twin brother Cameron Winklevoss added: “Prediction markets have the potential to be as big or bigger than traditional capital markets.”
Gemini Space Station made its Nasdaq debut in September and shares briefly rallied on the announcement, ticking up by nearly 32%.
States begin to bare their teeth at prediction markets
Business figures will be watching the developments closely. Recently, there have been warnings from state legislators on the legality of prediction markets. New York Assemblymember Clyde Vanel called for greater industry accountability in an interview last year, adding: “If you want to operate what is, in substance, a gambling platform, you need a license.”
Republican Tyler August in Wisconsin argued any gray area in state gambling law will leave the door ajar for federally regulated futures markets to swamp. August wrote in a memo to lawmakers: “If we leave a gray area in state law, national prediction platforms will fill it without our compact framework, Wisconsin oversight, or Wisconsin consumer safeguards.”
In Nevada, a judge ruled that prediction markets must fall under the purview of the state’s gaming laws in what was viewed as a precedent-setting defeat for Kalshi and other bullish backers of the market.
The pushback highlights a growing trend between state regulators and platforms that argue their products fall under federal commodities law rather than local gambling statutes. For states with established gaming regimes, prediction markets are increasingly viewed as a threat to licensing systems, tax revenues and consumer protections built over decades.
Regulators have warned that allowing federally approved event contracts to operate unchecked could create a parallel betting market outside state control. The legal uncertainty has injected new risk into a sector attracting attention from Wall Street, fintech investors and corporate hedgers, with outcomes likely to shape how far prediction markets can expand beyond their current niche.
What happens next
Gemini’s entry into prediction markets underscores how quickly the sector is moving from the margins of crypto experimentation into the mainstream of regulated finance. With CFTC approval in hand, Gemini joins a small but growing group of federally sanctioned platforms seeking to position event contracts as legitimate financial instruments rather than unlicensed wagering products. For proponents, the appeal lies in real-time price discovery and the ability to hedge against political, economic, or market-moving outcomes in a way traditional derivatives do not always allow.
Yet the regulatory pathway ahead remains uncertain. While federal approval provides a measure of legal cover, it does not resolve the growing conflict with state gaming authorities, many of whom argue that prediction markets functionally resemble sports betting and should be subject to local licensing, taxation, and consumer protection rules. The divergence between federal commodities oversight and state gambling law is increasingly likely to be tested in courts, particularly as larger, publicly traded companies like Gemini expand their offerings and attract a wider user base.
For investors and business leaders, the coming months could prove pivotal. A favorable legal environment may accelerate institutional participation and product innovation, while adverse rulings at the state level could slow expansion or force platforms to reassess their geographic reach.
As prediction markets gain visibility and capital, the balance struck between innovation and regulation will determine whether they evolve into a permanent fixture of U.S. financial markets or remain constrained by legal and political resistance.
References
- Gaming Intelligence: https://www.gamingintelligence.com/legal/223918-gemini-secures-cftc-approval-to-launch-prediction-markets/
- Troutman Pepper Locke: https://www.regulatoryoversight.com/2025/12/nevada-judge-rules-prediction-market-firm-falls-under-state-gaming-laws/
- Gaming Today https://www.gamingtoday.com/news/new-york-oracle-act-could-ban-prediction-markets/
- Yogonet: https://www.yogonet.com/international/news/2025/11/19/116391-prediction-markets-could-surge-if-wisconsin-stalls-on-sports-betting-bill-lawmaker-warns
