NEW YORK, Aug 14 (Reuters) - JPMorgan Chase ( JPM )

terminated its banking relationship with prediction market

platform Polymarket in October of last year, citing regulatory

concerns, a person familiar with the matter said on Friday.

The source spoke on the condition of anonymity to discuss

confidential information. The news was previously reported by

the Financial Times.

Prediction markets, which allow people to wager on ⁠event

contracts across a variety of topics including sports and

politics, have grown rapidly since the 2024 U.S. presidential

election and drawn regulatory scrutiny at both the state and

federal levels.

A Polymarket spokesperson said in an emailed statement: "We

maintain a close, active relationship with JPMorgan ( JPM ) across

multiple entities, operational integrations, and material

handling of customer fund flows."

"The strength of our relationship is highlighted by our CEO

speaking at three of their flagship events in the past year

alone. Any suggestion otherwise fundamentally mischaracterizes

our relationship," the spokesperson added.

Proponents say prediction market platforms provide valuable

insight into market sentiment, although critics liken them to

gambling and point to potential risks.

New York City Council Speaker Julie Menin earlier this

week accused major prediction market startups of using predatory

marketing practices ​to exploit young traders.

New York's attorney general sued Polymarket rival ​Kalshi

last month, saying its prediction market platform violates state

gambling laws.