Gemini Finally Gets Its Prediction Market License

After five years of waiting, Gemini Space Station, Inc. (GEMI) announced Wednesday that its subsidiary, Gemini Titan, LLC, has secured regulatory clearance to offer prediction markets to U.S. customers. The Commodity Futures Trading Commission granted Gemini Titan a Designated Contract Market license, which means American users can now trade event contracts directly through Gemini's web platform using funds from their existing accounts.

The initial offering will focus on straightforward "Yes" or "No" contracts about future events. Think of it as betting on outcomes, but with federal regulatory oversight and none of the offshore uncertainty that's plagued other platforms.

A Presidential Thank You Note

Tyler Winklevoss, Gemini's CEO, didn't hold back in crediting the political winds for finally getting this across the finish line. The company first submitted its DCM license application back in March 2020, which means they've been navigating the regulatory maze for half a decade.

"Today's approval marks the culmination of a 5-year licensing process and the beginning of a new chapter for Gemini," Winklevoss said. "It's incredibly refreshing and invigorating to have a President and a financial regulator who are pro crypto, pro innovation, and pro America."

That's a pretty direct shout-out to the incoming Trump administration, and it reflects a broader sense in the crypto world that regulatory attitudes are shifting.

Entering a Hot but Crowded Market

Gemini's timing is interesting because prediction markets are having a moment. Blockchain-based Polymarket recently made its U.S. comeback after the CFTC approved its relaunch. The platform had been forced to shut down American operations in 2022 due to regulatory enforcement, but it's now reportedly in early talks to raise funding at a valuation between $12 billion and $15 billion.

Meanwhile, Kalshi, which operates under federal regulation, just closed a reported $1 billion funding round that pushed its valuation to $11 billion. Together, these two companies control more than 90% of the prediction market industry, according to Dune Analytics data.

But it's not all smooth sailing. Both Polymarket and Kalshi are facing legal challenges from multiple states over their sports event contracts, with allegations that they're essentially running unlicensed online gambling operations. So Gemini is entering a market with huge demand and massive valuations, but also some serious regulatory landmines to navigate.

Market Reaction

Investors seemed pleased with the news. Gemini (GEMI) shares rallied 13.73% in after-hours trading on Wednesday, despite closing the regular session down 0.70% at $11.36. That's a solid vote of confidence for a company entering a competitive but potentially lucrative new business line.

For context, Gemini's price trends have been relatively weak across short, medium, and long-term timeframes compared to other cryptocurrency-linked stocks like Coinbase Global Inc. (COIN). This regulatory win could be the catalyst the company needs to change that trajectory.