Tema ETFs launched the Tema Trading and Prediction Markets ETF on September 9, trading under the ticker symbol DICE. The fund provides retail investors with early access to shares in privately held prediction market companies Kalshi and Polymarket through special purpose vehicles—investment structures that aggregate capital to purchase pre-public company shares.
Kalshi and Polymarket represent the fund's primary holdings, accounting for approximately 15% of total assets combined. The remaining portfolio includes established public companies such as Robinhood, Interactive Brokers, Intercontinental Exchange, and Coinbase. The fund carries a gross expense ratio of 0.75%.
Market Growth and Valuations
The prediction markets sector has expanded rapidly in recent months. Both platforms recorded monthly trading volumes exceeding $10 billion during summer months. Recent private financing rounds valued both Kalshi and Polymarket at more than $20 billion each, with reports indicating Kalshi may be pursuing capital at a $40 billion valuation.
According to Tema, holdings in both companies 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 early-stage exposure.
Regulatory Uncertainty
Multiple state governments are contesting how Kalshi and Polymarket should be classified legally. The central dispute concerns 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, positioning their contracts as financial derivatives rather than wagers. However, an unfavorable legal decision could reclassify these operations as sportsbooks subject to state gambling regulations, potentially restricting operations in states where sports wagering remains prohibited.
Neither Kalshi nor Polymarket has publicly disclosed plans for an initial public offering. Other ETFs including the ERShares Private-Public Crossover ETF and the KraneShares Public-Private AI and Technology ETF also maintain positions in these companies.
