So, are prediction markets legal, or not?
Yes. Wait, that was too easy. Let me go a little deeper, here. Prediction markets are legal in the US, at least for now. There’s a lot of noise about whether or not prediction markets are just a cover-u
p for betting, but that’s far from the case. Of course, as there’s a lot of talk online, it means that it’s in the spotlight. Naturally, the more attention it gets, the more it will come under fire. Just like anything in the US, rules can change.
Okay, who’s actually regulating US legal prediction markets?
Given the fact that it’s perfectly legal, prediction markets are, of course, regulated. As you may know, individual US states have the power to decide whether or not betting is permitted in the state. The states that decide to roll out betting can license and regulate it. Prediction markets are completely different. Prediction market sites are regulated by a Federal agency - the Commodity Futures Trading Commission (CFTC). In short, this is because prediction markets are considered financial trading and not betting.
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Let’s be honest - are legal prediction markets just betting?
No, prediction markets are not the same as betting. While there are a few similarities, they are completely different. Even the CFTC agrees, which is why prediction markets are federally approved. For prediction markets, you trade event contracts that are based on future outcomes. For example, who will win the next presidential election?
You will trade contracts on yes or no outcomes, and each contract is represented with a question. You will have the option to buy either a yes or no contract or choose from multiple options. Those individual options will then have yes or no contracts attached. If you predict correctly, you will then settle at $1. If you get it wrong, you settle at $0 and lose the cost of the contract.
Essentially, the only similarity between betting and prediction markets is that you need to predict the outcome correctly. Also, if you are correct, then you get a payout. That’s it. That’s where the familiarity ends.
Exploring the market depth at prediction market sites
Prediction market sites provide all sorts of categories, including politics, culture, sports, and crypto, for example. These will vary depending on the site you choose, so there’s a site out there for most interests. You can also access sites that focus on specific niches. For instance, you could find economic prediction market sites, which offer greater depth.
If you’re unsure about what types of sites will work better for you, I recommend exploring our comparison guides, such as Kalshi vs Polymarket.
To give you an idea of the types of markets you can find, let’s take a look at a few of the most popular options:
| Prediction Market Topics | Example Contracts |
| Politics | 2028 US Presidential Election winner? How many Senate Republicans will lose their primary in 2026? |
| Sports | Chinese Grand Prix Winner UFC Fight Night: Emmett vs. Vallejos |
| Culture | Who will win Best Actor at the Oscars? Who will win Survivor Season 50? |
| Crypto | Bitcoin price today at 3 pm EDT? Ethereum price at the end of 2026 |
| Climate | Highest temperature in Washington DC today? Will it rain in Houston in March? |
| Economics | Will there be a recession in 2026? How many dissenting votes at the next Fed meeting? |
| Tech & Science | Will the US confirm that aliens exist before 2027? When will SpaceX's Starship 12th launch? |
Pros and Cons of legal prediction markets in the US
As you can see, prediction markets are legal in the US states. You can trade on future outcomes at prediction market sites from all 50 US states, which is impressive coverage. Despite having a multitude of advantages, prediction markets do come with some pitfalls.
- Federally regulated
- Broad range of markets
- Transparent prices
- Legality could change
Conclusion: Where prediction markets stand today
Prediction markets are regulated at the federal level by the CFTC and are available in most US states. Some states are challenging certain contracts, mainly sports, in court, so availability can vary depending on where you are.
Are prediction markets going to stick around? That’s open. I mean, legalities are constantly shifting, so nothing is permanent. Having said that, I don’t expect prediction markets to disappear overnight. With a lot of talk about prediction markets, the interest remains high. If you are interested in getting stuck in, why not check out my recommended prediction market sites in the promotional banners?
Explore our handpicked prediction market sites
Are prediction markets legal? FAQs
Who regulates prediction markets in the US?
Platforms like Kalshi and Polymarket US operate as Designated Contract Markets (DCMs) under the Commodity Futures Trading Commission (CFTC), the federal regulator for futures and derivatives.
Are prediction markets regulated at the federal or state level?
They are regulated at the federal level by the CFTC. Some states argue that certain contracts, mainly sports contracts, fall under state gambling laws, and several of these cases are still in court. This is why availability can differ from state to state.
Are prediction markets available in every state?
Not always. Availability depends on the platform, the type of contract, and your location, and it can change as court cases move forward. Each platform checks your location during sign-up, so the app is the most reliable way to confirm what you can access.
Who can sign up on a prediction market?
Adults aged 18 or older in states where the platform is available. You will need to verify your identity, age, and location.