Polymarket introduces self-exclusion features and deposit caps to address gambling risks

Polymarket, the crypto-native prediction market that made its name letting people bet on elections and geopolitics, just added something you’d normally associate with DraftKings or FanDuel: responsible gambling tools. The platform rolled out non-revocable deposit limits, self-exclusion options, and a partnership with mental health provider Birches Health.

The timing is not coincidental. With over 98% of Polymarket’s trading volume in September coming from sports and multi-leg parlays, the platform looks a lot less like a “prediction market” and a lot more like a sportsbook. Regulators have noticed.

What Polymarket actually built

The new safety features hit the platform on September 30 and include three main components. First, deposit caps that users can set for themselves, and here’s the key detail: they’re non-revocable. Once you set a limit, you can’t simply turn it off in a moment of weakness at 2 AM.

Second, self-exclusion options that let users temporarily or permanently lock themselves out of the platform. Third, Polymarket added safety resources through its partnership with Birches Health, a provider focused on gambling addiction treatment.

Malea Otranto, Polymarket’s Global Head of Safety, indicated that the company plans to monitor how users interact with these tools and adjust them over time.

The regulatory backdrop

Before this rollout, Polymarket was conspicuously missing the kind of consumer safeguards that its competitors already offered. Kalshi, the CFTC-regulated prediction market, had deposit limits and self-exclusion features. Traditional sportsbooks are legally mandated to provide them. Polymarket had neither.

New York has filed a lawsuit against Polymarket seeking to enforce state gambling regulations against the platform. Polymarket responded with a countersuit, setting up a legal confrontation that could define how prediction markets are regulated at the state level going forward.

The core question is jurisdictional. Polymarket operates under CFTC oversight as a prediction market, but states like New York argue that when a platform functions like a gambling operation, it should be regulated like one. The distinction matters enormously: state gambling regulators impose licensing requirements, consumer protection mandates, and tax obligations that CFTC-regulated entities don’t face.

Sports betting ate the prediction market

The most striking data point in this story is that 98% figure. When Polymarket launched into mainstream consciousness during the 2024 US presidential election, it was widely understood as a political forecasting tool. Fast forward to September 2026, and sports markets and multi-leg parlays now dominate trading activity so thoroughly that the political prediction contracts Polymarket became famous for represent a rounding error in overall volume.

An influx of new users drawn by sports betting may not have experience with financial trading platforms. They’re used to the guardrails that regulated sportsbooks provide. Showing up to a platform built on blockchain infrastructure with no deposit limits and no self-exclusion option is a meaningfully different experience.

What this means for prediction markets

For Polymarket specifically, these features serve a dual purpose. They genuinely protect users from compulsive behavior. They also build a regulatory defense. If New York’s lawsuit proceeds, Polymarket can point to its safety infrastructure and argue it takes consumer protection seriously, even absent a state gambling license.

Whether Polymarket’s proactive approach will be enough to satisfy New York regulators remains an open question. The state’s lawsuit isn’t really about whether Polymarket has deposit limits. It’s about whether prediction markets that functionally resemble sportsbooks should be regulated as sportsbooks.