That’s according to a report Wednesday (May 27) from The Information, which noted that this effort is in response to pressure from international regulators and the U.S. Congress over illegal gambling and doing business with customers from countries facing sanctions.
The report said Polymarket is trying to convince users to share identifying information by offering faster trading speeds. The company recently debuted an online portal where customers can submit information such as passports, licenses and proof of residence.
The online forms ask customers to show they are not a resident of any regions prohibited by its terms of service, where governments have forbidden the prediction market from operating, or from countries subject to U.S. sanctions, such as Russia, North Korea and Cuba.
The shift marks a departure from Polymarket, which has until now allowed users to register with only an email address.
In addition, Polymarket is asking business users, like developers of trading apps that are connected to its platform, about their investors and location.
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The report noted that the changes come as Congress is investigating whether prediction markets are adequately enforcing regional bans and preventing insider trading. Meanwhile, regulators in the Netherlands have threatened the company with penalties for providing an unlicensed gambling platform to that country’s residents.
Polymarket is also currently navigating a competitive landscape against its primary rival, Kalshi, which operates as a licensed exchange in the U.S.
The report also pointed out that the new compliance measures have attracted criticism from Polymarket users in the platform’s Discord community, who argued that mandatory Know Your Customer (KYC) ID verification could alienate its core user base.
“What? Is this an attempt to destroy everything,” said one user.
“Polymarket will go down the drain if they make KYC mandatory,” wrote another.
In other prediction market news, Minnesota last week became the first state to ban the industry from operating within its borders.
As covered by Competition Policy International—a PYMNTS company—the move escalated a growing jurisdictional fight between state and federal regulators over control of the industry. Immediately after the law was signed, the Commodity Futures Trading Commission (CFTC) filed a lawsuit to block its enforcement.
“The dispute marks the latest flashpoint in a widening conflict between states attempting to regulate what they view as gambling operations and federal officials who argue the markets fall under federal commodities law,” that report said.
