Key TakeawaysThe DICE ETF from Tema ETFs debuted on September 9, providing indirect investment opportunities in prediction market leaders Kalshi and PolymarketInvestments are made through special purpose vehicles holding private company shares, not prediction market trading contractsRecent funding rounds valued both Kalshi and Polymarket at more than $20 billion each, with reports of Kalshi pursuing a $40 billion valuationBoth platforms exceeded $10 billion in monthly trading volume during the summer monthsRegulatory uncertainty persists as multiple states challenge the platforms’ classification, potentially treating them as gambling operationsOn September 9, Tema ETFs introduced the Tema Trading and Prediction Markets ETF to the market. Trading under the symbol DICE, this fund provides retail investors with an unprecedented opportunity to gain exposure to private prediction market companies Kalshi and Polymarket before they potentially go public.Tema launching a prediction markets ETF (theme ETF not actual event contracts, SEC still pondering those) but it has 15% in privates Kalshi and Polymarket. This makes sense to me re using the 15% illiquidity bucket- theme ETFs or sectors might as well get dose of private co part… pic.twitter.com/ybFfbyhppL— Eric Balchunas (@EricBalchunas) September 9, 2026Since both platforms remain privately held, ordinary investors have been locked out until now. The DICE ETF solves this problem through special purpose vehicles—investment structures that aggregate capital from multiple investors to purchase shares in pre-public companies.While Kalshi and Polymarket represent the fund’s primary attractions, they account for roughly 15% of total holdings combined. The remaining portfolio consists of established public companies including Robinhood, Interactive Brokers, Intercontinental Exchange, and Coinbase.Investors in the fund will pay a gross expense ratio of 0.75%.The Surging Prediction Markets SectorThe prediction markets industry has experienced explosive growth recently. Both major platforms recorded monthly trading volumes exceeding $10 billion during summer months, fueled in part by high-profile sporting competitions such as the World Cup.According to Tema President Steve Munroe, prediction market trading activity could expand nearly twentyfold to hit $1 trillion annually by decade’s end. These projections have captured the attention of asset managers seeking to create investment vehicles targeting this emerging sector.Recent private financing rounds have assigned valuations surpassing $20 billion to both Kalshi and Polymarket. Industry sources indicate Kalshi may be pursuing additional capital at a $40 billion valuation.According to Tema, the fund’s holdings in both Polymarket and Kalshi were acquired at approximately 10% to 13% below their most recent private valuations. Should either company complete an initial public offering at premium valuations, ETF shareholders could realize gains from their early-stage exposure.Regulatory Headwinds Pose ChallengesThe path forward isn’t without obstacles. Multiple state governments are contesting how Kalshi and Polymarket should be legally classified. The central dispute centers on whether their sports-related prediction contracts constitute financial instruments or gambling activities.Both platforms maintain they should fall under federal oversight from the Commodity Futures Trading Commission. Their position is that these contracts serve as financial derivatives, not wagers.However, an unfavorable Supreme Court decision could reclassify these operations as sportsbooks subject to state gambling regulations. This outcome would restrict their ability to operate in states where sports wagering remains prohibited, including major markets like California, Georgia, and Texas.Neither platform has publicly disclosed plans for an initial public offering. When contacted, Kalshi declined to discuss potential IPO timing. Polymarket did not provide a response to inquiries.DICE isn’t the only ETF offering pre-IPO exposure to these companies. The ERShares Private-Public Crossover ETF maintains a $30 million position in Kalshi, while the KraneShares Public-Private AI and Technology ETF holds a smaller Polymarket stake.At present, DICE represents among the most accessible routes for mainstream investors seeking exposure to the prediction markets sector, despite ongoing regulatory questions surrounding the industry’s future.The post DICE ETF Offers Early Access to Kalshi and Polymarket Shares Before Public Debut appeared first on Blockonomi.