Are Prediction Markets Legal in the US? [2026 Guide]

Yes. Prediction markets are legal in the US, but only on properly regulated platforms. Two CFTC-approved platforms hold full Designated Contract Market licences as of 2026: Kalshi and Robinhood Predict. Both are legal in all 50 US states for event contract trading under federal CFTC oversight.

Several other platforms operate under different regulatory frameworks. PrizePicks Predict, FanDuel Predicts, DraftKings Predictions, Sleeper Markets, Betr Predictions, and Novig operate under state-by-state daily fantasy or prediction market licensing rather than federal CFTC oversight. Coverage varies by state. Polymarket is geo-blocked for US users following its 2022 CFTC settlement.

The legal picture changed significantly in 2024 when Kalshi won a federal court case against the CFTC that confirmed election prediction markets are legal under CFTC oversight. The ruling locked in the regulatory foundation for the regulated US prediction market industry and is the most important legal development in the category to date.

For platform rankings of CFTC-regulated US options see our best regulated prediction markets guide. For broader US platform coverage including state-licensed sports prediction sites see our home page.

The Commodity Futures Trading Commission is the US federal agency that oversees derivatives markets including futures, options, and event contracts. Prediction market platforms can register with the CFTC as Designated Contract Markets (DCMs), the same regulatory framework that covers the Chicago Mercantile Exchange and the Intercontinental Exchange.

Holding a DCM licence is not a one-time approval. It is an ongoing compliance obligation. Platforms must maintain audited financial controls, segregate customer funds, file regular reports with the CFTC, comply with capital requirements, and submit to ongoing examinations. CFTC oversight gives the regulator real ongoing leverage over platform behaviour, which is the practical foundation for the consumer protections that come with regulation.

Kalshi was the first prediction market to win full CFTC DCM status in 2020 after several years of regulatory engagement. Robinhood Derivatives received its DCM approval in 2025, allowing the launch of Robinhood Predict inside the standard Robinhood mobile app. Both platforms appear on the CFTC's official Designated Contract Market list, which is publicly verifiable on the CFTC website.

The CFTC framework is the strongest US regulatory protection available for event contract trading. Customer funds are held in segregated accounts. Contracts are legally enforceable under federal law. You have a formal CFTC dispute resolution channel. Federal regulation pre-empts most state-level restrictions on event contracts because the CFTC operates uniformly across all 50 US states.

The most important legal event for US prediction markets in recent years was the 2024 federal court ruling in Kalshi's lawsuit against the CFTC. The case revolved around whether Kalshi could list event contracts tied to US congressional and presidential election outcomes.

The CFTC initially objected to Kalshi listing election contracts on the grounds that they were too similar to gambling on elections, which CFTC rules historically prohibited. Kalshi sued the CFTC in 2023 to challenge that interpretation. In summer 2024, a federal court ruled in Kalshi's favour, allowing election prediction markets to list under CFTC DCM oversight.

The ruling had three immediate effects. First, Kalshi opened election markets to active US trading within weeks of the ruling. Second, it confirmed that prediction markets on real-world political events fall within the CFTC's event contract framework rather than being treated as state-regulated gambling. Third, it provided regulatory certainty for other CFTC-regulated platforms, including Robinhood Predict, which launched in 2025 with election market support.

The longer-term effect is that the regulatory foundation for US prediction markets is significantly clearer than before the ruling. Future expansion of regulated prediction market coverage now operates against an established legal precedent rather than ambiguous CFTC interpretations. Expect substantial growth in regulated US prediction coverage over the next several years.

Federal CFTC regulation pre-empts most state restrictions on event contract trading. Both Kalshi and Robinhood Predict operate legally in all 50 US states because federally regulated derivatives exchanges are not subject to most state-level rules that apply to gambling or daily fantasy products. This is one of the biggest practical advantages of the CFTC-regulated framework over state-licensed alternatives.

State-licensed sports prediction platforms operate state-by-state. PrizePicks Predict is available in the most US states (high 30s) thanks to dual licensing as a daily fantasy product in some states and a prediction market in others. FanDuel Predicts and DraftKings Predictions follow their respective sportsbook footprints plus prediction-specific licensing. Sleeper Markets, Betr Predictions, Novig, and Fanatics Markets have narrower state availability.

States with established sports betting and DFS frameworks typically support most prediction platforms. New York, New Jersey, Pennsylvania, Massachusetts, Illinois, Ohio, Michigan, Arizona, and Colorado all support most of the platforms in the regulated US prediction space. California has restrictions that limit state-licensed sports prediction availability but allow CFTC-regulated platforms. Texas and Florida have variable rules that change regularly.

States with restrictive gambling frameworks (Hawaii, Utah, Idaho, and a few others) have fewer options. CFTC-regulated platforms remain available in these states because federal regulation pre-empts most state restrictions on event contracts. Sports prediction platforms are typically unavailable. Always check the current state list on each platform's website before signing up because state availability changes regularly.

Polymarket is the largest prediction market in the world by trading volume but it is not legally accessible to US users. The platform settled with the CFTC in January 2022 over allegations it operated unregistered binary options markets without proper US regulatory oversight. As part of the settlement, Polymarket paid a $1.4 million fine and agreed to block all US IP addresses from accessing the platform.

Polymarket continues to operate as a decentralised exchange on the Polygon blockchain and is freely accessible in the UK, Canada, Australia, and most other countries outside the US. International users have access to deep political and event markets with strong liquidity. The platform's US block is geographic and technical (IP-based) rather than a fundamental limitation of the underlying smart contract infrastructure.

Using a VPN to access Polymarket from the US violates the platform's terms of service and may also violate US law. We do not recommend this under any circumstances. The risks include account closure, fund forfeiture, and potential regulatory exposure that far outweigh any liquidity advantage. Stick to US-legal platforms if you live in the United States.

US users who want similar coverage to Polymarket should consider Kalshi for the deepest regulated US event contract market, Robinhood Predict for the most user-friendly US-regulated experience inside an existing brokerage app, or one of the state-licensed sports prediction platforms for sports-specific player props.

CFTC-regulated platforms (Kalshi, Robinhood Predict) can list a wide range of event contracts subject to CFTC review. Confirmed allowed categories include political event contracts (election outcomes, primary results, congressional control), economic indicator contracts (Federal Reserve rate decisions, CPI inflation prints, unemployment data, GDP), weather event contracts (hurricane landfall, temperature records), select sports event contracts, and entertainment award contracts.

State-licensed sports prediction platforms operate within their state's specific rules. PrizePicks Predict, FanDuel Predicts, DraftKings Predictions, Sleeper Markets, Betr Predictions, and Fanatics Markets list player prop and game outcome markets across major US sports plus international leagues where state rules permit. Coverage varies by state and by platform. Some states limit specific entry types or prop combinations.

Categories that CFTC-regulated platforms have generally not yet listed include single-stock event contracts at scale, cryptocurrency price target markets (which have been more common on crypto exchange-integrated platforms), and certain culturally sensitive prediction categories where the CFTC has signalled regulatory caution. Coverage continues to expand as the CFTC clarifies which event types fall within the existing event contract framework.

The practical guidance for US users is to start with platforms that openly accept US users and operate under verified regulatory licensing. The CFTC's official Designated Contract Market list is publicly verifiable, as are state DFS and sportsbook licensing registers. Avoid platforms that use vague regulatory claims or that geo-block US users while marketing to US audiences indirectly.

Regulated US prediction market platforms ship the standard consumer protections expected from CFTC-regulated financial venues. Three protections matter most for everyday users.

First, segregated customer funds. Customer deposits are held in a separate bank account from the platform's operating capital. If the platform fails, your funds are protected and returnable. Both Kalshi and Robinhood Predict implement segregated fund protection as required by CFTC rules.

Second, federally enforceable contracts and dispute resolution. When you place a winning trade, the platform owes you the contract value as a matter of federal law. If a market is resolved incorrectly, you can pursue formal CFTC dispute channels rather than relying solely on platform customer support.

Third, transparent terms, fees, and resolution criteria. CFTC-regulated platforms publish their resolution rules, fee schedules, and platform terms in advance of contract listings. There are no surprise fees or unilateral rule changes mid-contract. If the platform updates its terms, advance notice is required and existing contracts continue under the original terms.

For deeper context on the trade-offs between regulated and unregulated platforms see our best regulated prediction markets guide. For specific platform reviews see our Kalshi review and Robinhood Predict review.