Are Prediction Markets Legal in the US? (October 2026)
Yes, under federal law. Prediction markets like Kalshi and Polymarket run as exchanges regulated by the Commodity Futures Trading Commission (CFTC), the federal agency that oversees futures trading. The open question is whether their sports contracts also have to follow each state's gambling laws. As of October 7, 2026, two federal appeals courts say yes, one says no, and three petitions are waiting at the US Supreme Court.
For sports bettors, the result is a patchwork. The same NFL contract is live in one state, blocked in the next, and the subject of a lawsuit in a third.
How Are Prediction Markets Legal in the US?
Prediction markets are legal because federal law treats them as financial exchanges, not gambling sites. A sportsbook needs a license from every state it operates in. A prediction market needs approval from one federal regulator, the CFTC, and then operates under the Commodity Exchange Act (CEA), the federal law that covers futures and similar contracts. That federal status rests on how the contracts are built, because a sports contract on prediction market apps works like a simple stock, not a sportsbook bet. You buy "Yes" or "No" on an outcome, such as a team winning a game, at a price between 1 cent and 99 cents. If you're right, the contract pays $1. You trade against other users, not against the house.
The legal setup has four parts:
The exchange gets federal approval -The CFTC registers the platform as a designated contract market (DCM), the same category as major futures exchanges. Kalshi received this status in November 2020 and launched in July 2021. Polymarket bought a registered exchange, QCEX, for $112 million in July 2025 and got CFTC clearance to return to US users, where it now competes with Kalshi on fees, markets, and prediction market bonuses.
The exchange lists contracts on its own - A registered exchange adds a new contract by certifying to the CFTC that it follows the law. The CFTC reviews contracts after the fact but does not approve each one in advance.
The CFTC holds a veto over "gaming" contracts - A section of the CEA lets the CFTC bar event contracts tied to gaming and a short list of other activities when they go against the public interest.
The platforms say federal law overrides state law - Kalshi, Polymarket, and the CFTC argue that Congress gave the CFTC exclusive control over these exchanges, so state gambling laws don't apply. Lawyers call this federal preemption.
When Did Prediction Markets Start Offering Election and Sports Contracts?
Kalshi added election contracts in October 2024 and sports contracts in January 2025, on top of the economy, weather, and financial contracts it launched with in July 2021. The table below lists the court rulings and CFTC decisions that got each one there.
| Date | What happened |
|---|---|
| 2023 | CFTC votes 3 to 2 to reject Kalshi's contracts on which party controls Congress, calling them gaming |
| Sept. 12, 2024 | A federal judge in Washington, D.C., rules the CFTC overstepped and lets Kalshi list election contracts |
| Oct. 2, 2024 | The D.C. Circuit refuses to pause that ruling, and Kalshi's election contracts go live |
| January 2025 | Kalshi self-certifies and launches sports contracts, starting with championship winners |
| May 2025 | CFTC drops its appeal in the election case |
| June 10, 2026 | CFTC proposes its first formal definition of "gaming" for event contracts |
Why States Disagree
The CEA gives the CFTC power over "swaps," a type of financial contract. States argue a bet on a football game is not a swap, so their gambling laws still apply, including licensing, age limits, and taxes. The money involved explains the fight: prediction markets traded $51 billion in 2025, and sports made up about 80% of Kalshi's volume since July 2024.
Most state actions target sports contracts only, so contracts on the economy, weather, and financial markets usually stay live even in states with a court order. A few states reach further:
Washington's court order against Kalshi also bars election, politics, entertainment, culture, tech, science, and "mention" contracts (bets on whether a public figure says a specific word), leaving only finance, economics, climate, and commodities.
Arizona's criminal charges against Kalshi cover election contracts as well as sports.
New York's suit against Polymarket asks a court to stop it from operating in the state altogether.
Minnesota passed a law banning prediction markets entirely, but a federal judge blocked it before it took effect.
Prediction Market Availability by State
As of October 7, 2026, courts have blocked prediction markets in 3 states: Michigan, Nevada, and Washington. Prediction markets are live in the other 47 states and Washington, D.C. In 7 of those, a court has cleared the state to enforce its laws: Connecticut, Iowa, Maryland, New York, Ohio, Tennessee, and Utah. In 10 more, a lawsuit, order, or enforcement threat is pending.
Each status shows which contracts a state action covers. When a state blocks or targets only some contracts, the cell names them, and everything else stays live.
The table below uses four statuses.
Available means no state block is known.
Contested means contracts are live, but a lawsuit, order or threat is pending.
At risk means a court has cleared the state to enforce its laws, with no confirmed shutdown yet.
Blocked means a court order requires the platform to geofence the state, which means blocking users located there.
| State | Prediction Markets | What's driving the status |
|---|---|---|
| Alabama | Available | No state action |
| Alaska | Available | No state action |
| Arizona | Contested (sports and election contracts) | State filed criminal charges against Kalshi over sports and election contracts; a federal court barred enforcement in May, and Arizona asked the Ninth Circuit to lift that order |
| Arkansas | Available | No state action |
| California | Available | No state action; tribes sued under federal tribal gaming law, and Kalshi blocks sports contracts on three reservations |
| Colorado | Available | No state action |
| Connecticut | At risk (sports contracts) | A federal judge refused Aug. 10 to block the state; state sued Kalshi Aug. 27 and ordered nine platforms to stop Sept. 10; CFTC sued the state |
| Delaware | Available | No state action |
| District of Columbia | Available | No state action |
| Florida | Available | No state action |
| Georgia | Available | No state action |
| Hawaii | Available | No state action |
| Idaho | Available | No state action |
| Illinois | Contested (sports and political contracts) | Gaming board sent cease-and-desist letters over sports and political contracts in 2025; new law adds licensing and a 1.75% to 3.5% fee; a federal judge partly blocked enforcement Oct. 2 |
| Indiana | Available | No state action |
| Iowa | At risk (sports contracts) | A federal judge refused Sept. 10 to block Iowa from enforcing its gambling laws against Kalshi; Kalshi's suit also challenges Iowa's ban on election betting; a Senate bill to license and tax prediction markets stalled in the House |
| Kansas | Available | No state action |
| Kentucky | Contested (sports contracts) | Attorney general sued Kalshi and Polymarket June 17; CFTC sued the state June 23; a 14.25% tax on operators' transaction fees starts Jan. 1, 2027 |
| Louisiana | Available | Regulator told sportsbooks in December 2025 that sports event contracts are sports bets; no block |
| Maine | Available | No state action |
| Maryland | At risk (sports contracts) | A federal judge refused to block the state in August 2025; Fourth Circuit ruling pending; Baltimore sued Kalshi and Polymarket Aug. 13 |
| Massachusetts | Contested (sports contracts) | State won an injunction Jan. 20, paused since February during the appeal |
| Michigan | Blocked (sports contracts only) | Court order signed Sept. 1 requires a geofence, with a $500,000 daily fine; Robinhood agreed to close its Michigan sports contracts by Oct. 9 |
| Minnesota | Contested (all contracts) | State felony ban on all prediction markets, not just sports, blocked by a federal judge July 27; the state is defending the law |
| Mississippi | Available | No state action |
| Missouri | Contested (sports contracts) | Attorney general ordered six platforms to stop in mid-September; 30-day deadline lands Oct. 16 to 18 |
| Montana | Contested | Kalshi's suit was dismissed Sept. 21 after the state agreed not to enforce until the Ninth Circuit rules on the Nevada rehearing |
| Nebraska | Available | No state action |
| Nevada | Blocked (sports, election, and entertainment contracts) | Ninth Circuit ruled for Nevada Aug. 28; state courts blocked Kalshi and Polymarket |
| New Hampshire | Available | No state action |
| New Jersey | Available | Kalshi won at the Third Circuit in April; state asked the Supreme Court to step in |
| New Mexico | Contested | State sued Kalshi June 4; CFTC and Polymarket sued the state |
| New York | At risk | A federal judge refused July 7 to block the state; state sued Kalshi July 31 and Polymarket Sept. 24, asking a court to stop Polymarket from operating in the state entirely; CFTC ordered Kalshi to keep operating Aug. 11 |
| North Carolina | Available | New budget allows CFTC-registered platforms and adds a 6% tax from Jan. 1, 2027 |
| North Dakota | Available | No state action |
| Ohio | At risk (sports contracts) | Sixth Circuit ruled for Ohio Sept. 25; state regulator issued a $5 million fine notice against Kalshi in April |
| Oklahoma | Available | No state action |
| Oregon | Available | No state action |
| Pennsylvania | Available | No state action |
| Rhode Island | Contested | State sued Kalshi and Polymarket May 21; CFTC sued the state May 28 |
| South Carolina | Available | No state action |
| South Dakota | Available | No state action |
| Tennessee | At risk (sports contracts) | Sixth Circuit lifted Kalshi's protection order Sept. 25, freeing the state to enforce |
| Texas | Available | Legislative committees are studying the issue, with recommendations due in 2027 |
| Utah | At risk (sports contracts) | Federal judge issued the first final ruling in the fight Aug. 4, holding Utah can enforce; Tenth Circuit denied emergency relief Sept. 8 |
| Vermont | Available | No state action |
| Virginia | Available | No state action |
| Washington | Blocked (sports, election, politics, entertainment, culture, tech, science, and mention contracts; finance, economics, climate, and commodities stay live) | County court order bars sports, election, and most non-financial contracts since Sept. 2 |
| West Virginia | Available | No state action |
| Wisconsin | Contested | A federal court sided with the state in July (on appeal); CFTC and a tribe also sued |
| Wyoming | Available | No state action |
States That Are Contesting the Legal Status of Prediction Markets
State governments in 21 states are suing, issuing orders, or defending suits over prediction markets as of October 7, 2026. In 20 of them, prediction markets are contested, at risk, or blocked. The 21st is New Jersey, where Kalshi won in court and prediction markets trade freely while the state appeals to the Supreme Court.
Courts have blocked prediction markets in Nevada, Michigan, and Washington, with orders naming Kalshi in all three and Polymarket in Nevada. Forty-four state attorneys general also told the CFTC on July 28 that it has no authority over sports prediction markets. States lean on five tools: lawsuits, cease-and-desist letters, criminal charges, new laws, and taxes. Their core argument is that sports contracts are state-regulated gaming products, so state licensing, age, and tax rules apply.
Sports contracts draw the most action, but states attack prediction markets on seven fronts:
Election and political contracts: Arizona bans election wagering and charged Kalshi with 4 counts tied to election contracts. Washington's court order bars Kalshi's election and politics contracts, and Nevada's injunction against Polymarket covers election contracts.
Entertainment, culture, and "mention" contracts: Nevada and Washington bar entertainment contracts, and Washington also bars "mention" contracts, which pay out on whether a person says a specific word.
Age limits: Prediction markets accept traders at 18, while most states set 21. New York's suit against Polymarket centers on traders aged 18 to 20.
Consumer protection: Washington and Baltimore sued Kalshi under consumer-protection law rather than gambling law.
Advertising: Ohio restricts Kalshi's advertising, Minnesota's law makes advertising a prediction market a felony, and the New York City Council opened a probe into prediction-market marketing.
Player protections: Michigan argues Kalshi skips state rules on age verification, self-exclusion, and deposit limits.
Taxes and fees: Illinois adds transaction fees, Kentucky's tax on prediction markets starts Jan. 1, 2027, and New Jersey has a tax proposal pending.
The states' strongest results so far are the Ninth Circuit ruling for Nevada (Aug. 28) and the Sixth Circuit ruling for Ohio and Tennessee (Sept. 25). The Sixth Circuit went further than any other court: it held that even if the contracts are swaps, the CEA does not override state gaming law.
Other actions sit outside state government. Tribes in California, Wisconsin, and New Mexico have sued Kalshi under the Indian Gaming Regulatory Act, and the Ninth Circuit ruled for two California tribes, the Blue Lake Rancheria and the Chicken Ranch Rancheria. Baltimore sued Kalshi, Polymarket, and three other operators under consumer-protection law in August. Arkansas, Louisiana, and Texas have issued opinions, notices, or studies without action against any prediction market.
The 21 states are listed alphabetically below, each with a short account of how the dispute got there. Kalshi and Polymarket come up most often because states name them in more lawsuits and orders than any other platform.
Arizona
Arizona is the only state to file criminal charges against a prediction market, but a federal court has frozen the case. In March 2026, AG Kris Mayes charged Kalshi with 20 misdemeanors in Maricopa County: 4 tied to election contracts, which Arizona law bans, and 16 tied mainly to sports contracts. The CFTC sued Arizona in April, and on May 5 a federal judge barred the state from enforcing its laws against CFTC-registered exchanges. Arizona's gaming regulator had already sent Polymarket a cease-and-desist in Dec. 2025.
After the Ninth Circuit ruled for Nevada on Aug. 28, Mayes asked the same court to throw out Arizona's injunction, arguing the Nevada ruling now controls. That request is pending.
Connecticut
Connecticut moved from warnings to lawsuits in 2026. The CFTC sued the state in April to stop it from enforcing its gaming laws against federally registered exchanges. In August, a federal judge refused to shield Kalshi, and the state sued Kalshi in state court later that month; Kalshi has appealed the federal ruling to the Second Circuit. On Sept. 10, Gov. Ned Lamont announced cease-and-desist orders against nine more platforms, including Polymarket, Coinbase, Crypto.com, and Robinhood, plus 29 subpoenas.
The CFTC asked a federal court on Sept. 11 to block those orders. That request and Kalshi's Second Circuit appeal are both pending.
Illinois
Illinois went after prediction markets first through its regulator and then through a new law. The Illinois Gaming Board sent cease-and-desist letters to Kalshi, Crypto.com, and Robinhood over sports and political contracts, and to Polymarket on Jan. 27, 2026. The CFTC sued Illinois in April. The state then passed SB 3019, which requires a state license and charges transaction fees, and Kalshi sued before it took effect on July 1.
On Oct. 2, Judge Martha Pacold blocked SB 3019's licensing and criminal provisions for Kalshi, Coinbase, and the CFTC, but left the fees unresolved. The ruling does not cover Polymarket. Proposed injunction terms are due Oct. 29.
Iowa
Iowa has never filed enforcement against a prediction market, but Kalshi sued the state in March 2026 after officials declined to rule it out. In September, a federal judge refused to block Iowa's attorney general and Racing and Gaming Commission from enforcing state gaming law, leaving the state free to act. Iowa's next filing is due Nov. 9.
Kentucky
Kentucky is fighting prediction markets through both a tax and a lawsuit. The state enacted a 14.25% excise tax on prediction-market transaction fees, starting Jan. 1, 2027, and its attorney general sued Kalshi and Polymarket in state court on June 17. The CFTC then sued Kentucky, and argument in that case is set for Oct. 9.
Maryland
Maryland was one of the first states to win in court against a prediction market. Kalshi sued to block Maryland's gaming law, and in Aug. 2025 a federal judge refused. Maryland's gaming regulator followed with a warning on prediction markets in Nov. 2025. Kalshi's appeal reached the Fourth Circuit, which heard argument on May 7, 2026. No ruling has come yet, and when it arrives, it becomes the fourth federal appeals decision on the issue.
Massachusetts
Massachusetts was the first state to sue a prediction market over sports contracts. AG Andrea Campbell sued Kalshi in state court in Sept. 2025, and in January 2026 a Superior Court judge issued the first court order of its kind, telling Kalshi to geofence the state. The judge then paused the order while Kalshi appealed. Polymarket sued the attorney general in federal court in February; that case is on hold.
The Supreme Judicial Court heard the appeal on May 4, and reports describe the justices as skeptical of Kalshi. No ruling has come yet.
Michigan
Michigan is one of three states where a court has blocked a prediction market, with its order aimed at Kalshi. AG Dana Nessel sued Kalshi under state sports-gaming law on March 5, 2026. A temporary order halted Kalshi's sports contracts in June, and on Sept. 1 an Ingham County judge replaced it with a preliminary injunction: Kalshi must geofence Michigan or pay $500,000 per day. In July, the CFTC used emergency powers to order Kalshi to fulfill open trades with Michigan residents, overriding a state court order to cancel them. By then, Kalshi had already unwound those trades to comply with the court, leaving it caught between conflicting state and federal orders.
Michigan has not sued Polymarket. Polymarket sued Michigan the day after the state sued Kalshi, but a federal judge refused to block the state in March. The Kalshi case now moves toward final judgment.
Minnesota
Minnesota passed the first state law that makes hosting or advertising a prediction market a felony. The ban was signed on May 18, 2026. Kalshi and Polymarket sued, and on July 27 Judge Katherine Menendez blocked the law before it took effect. A pretrial conference is set for Oct. 13.
Missouri
Missouri skipped the courts and went straight to orders. On Sept. 18, 2026, AG Catherine Hanaway sent cease-and-desist letters to Polymarket, Kalshi, Crypto.com, Novig, Underdog, and Robinhood, arguing their sports contracts are unlicensed sports gambling under Missouri law. Hanaway said any operator must hold a state license, pay state taxes, and keep out users under 21. The letters gave 30 days to comply, so the deadline falls about Oct. 18, and Hanaway warned that noncompliance triggers enforcement.
Montana
Montana is on pause. Kalshi sued in April 2026 after Montana ended a standstill agreement, and a federal judge refused to block the state in August. On Sept. 17, both sides agreed to drop the case, and Montana agreed not to enforce until the Ninth Circuit finishes the Nevada appeal, plus 30 days' written notice. The court dismissed the case on Sept. 21.
Nevada
Nevada is the only state where courts have blocked two prediction markets, Kalshi and Polymarket. State courts granted preliminary injunctions against Kalshi in April 2026 and against Polymarket on May 29, the latter covering sports, election, and entertainment contracts. Kalshi's federal protection ended on Aug. 28, when the Ninth Circuit ruled 3 to 0 that its sports contracts are likely not swaps.
Kalshi has asked the full Ninth Circuit to rehear the case, or to wait for new CFTC rules; Nevada opposes. Robinhood and Crypto.com have taken their Nevada losses to the Supreme Court, and Nevada's responses are due Oct. 14 and 15.
New Jersey
New Jersey is the only state where a federal appeals court has ruled for prediction markets, in a case Kalshi brought. Kalshi sued after New Jersey moved to apply its gaming laws, and on April 6, 2026, the Third Circuit ruled 2 to 1 that its sports contracts are likely federally regulated swaps beyond the reach of state law. The ruling protects prediction markets in every state the Third Circuit covers: New Jersey, Pennsylvania, and Delaware. On Sept. 2, AG Jennifer Davenport asked the Supreme Court to reverse (Flaherty v. KalshiEX, No. 26-299), and Kalshi's response is due Nov. 9. A 9% net-income tax on prediction markets is expected back before the legislature this fall.
New Mexico
New Mexico sued Kalshi on June 4, 2026. Polymarket responded on June 30 by suing the state's attorney general and Gaming Control Board, arguing it faced imminent enforcement, and the CFTC has also sued New Mexico.
New York
New York is suing two prediction markets while the CFTC tells one of them, Kalshi, to keep running. Kalshi sued the state first, and a federal judge denied its injunction on July 7, 2026. AG Letitia James then sued Kalshi on July 31, seeking more than $36 billion. The CFTC answered on Aug. 11 with an emergency order directing Kalshi to keep operating in New York, which James has asked a federal court to disregard. On Sept. 24, James and Gov. Kathy Hochul sued Polymarket US over traders aged 18 to 20, and Polymarket countersued in federal court.
State lawmakers have also proposed the ORACLE Act, which sets out to regulate prediction exchanges and ban certain contracts; it has not passed.
Ohio
Ohio's fight with prediction markets started over a license and a fine against Kalshi. A federal judge refused in March 2026 to block Ohio's gaming laws, and in April the Ohio Casino Control Commission proposed a $5 million fine against Kalshi for unlicensed sports gaming, citing Ohio's 20% gaming tax, age verification, and advertising rules. Kalshi sued in state court, arguing the fine violates its right to a jury trial. On Sept. 25, the Sixth Circuit upheld the March ruling, holding that Kalshi's contracts are not swaps and that federal law does not override Ohio law even if they are.
Ohio then widened its focus. On Oct. 2, the commission sent cease-and-desist letters to 10 other operators, including Polymarket, with 14 days to respond. Kalshi's deadline to seek rehearing is Oct. 9.
Rhode Island
AG Peter Neronha sued Kalshi and Polymarket on May 21, 2026, and Kalshi countersued. The CFTC moved to join the case on May 28, and the case is pending.
Tennessee
Tennessee was among the first states to order prediction markets out. On Jan. 9, 2026, its sports-gaming regulator ordered Kalshi, Polymarket, and Crypto.com to stop offering sports contracts. Kalshi won a federal injunction in Nashville on Feb. 19, but the Sixth Circuit vacated it on Sept. 25 in the same ruling that went against Kalshi in Ohio. Kalshi's injunction ends once that ruling formally takes effect, about Oct. 16 if Kalshi does not seek rehearing.
Utah
Utah's governor and attorney general pledged to stop prediction markets, and Kalshi sued pre-emptively in Feb. 2026. A federal judge ruled on Aug. 4 that federal law does not override Utah's gaming laws, and the Tenth Circuit denied Kalshi emergency relief on Sept. 8. Utah is now free to enforce but has not filed an enforcement action, and Kalshi's Tenth Circuit appeal is pending.
Washington
Washington is one of three states where a court has blocked a prediction market, and its order against Kalshi reaches far beyond sports. The state's Gambling Commission warned in Dec. 2025 that event contracts are not authorized, and AG Nick Brown sued Kalshi under consumer-protection law on March 27, 2026. A King County judge issued a preliminary injunction in July, then amended it on Aug. 12 to bar sports, election, politics, entertainment, culture, tech and science, and "mention" contracts, with a $120,000 daily penalty for missed deadlines. Finance, economics, climate, and commodities contracts stay. The geofencing deadline passed on Sept. 2, and the judge denied Kalshi's request to reconsider on Sept. 18. Polymarket is not named.
Wisconsin
AG Josh Kaul sued Kalshi, Polymarket, and three other operators in Dane County on April 23, 2026. The CFTC asked a federal court to block the state, but Judge William Griesbach denied that request in July. The CFTC has appealed to the Seventh Circuit, and the next filing there is due Oct. 21.
What is the CFTC doing about it?
The CFTC is defending its exclusive authority in court while writing the first rules on which contracts are allowed. It has sued nine states, used emergency powers to keep Kalshi running over state orders, and sent two new rules to White House review on Sept. 28.
On enforcement, the agency (chaired by Michael Selig) has sued Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin, arguing the CEA overrides their enforcement. It won an injunction in Arizona in May 2026 and a partial one in Illinois on Oct. 2.
The rulemaking is the part that decides what you can trade. The proposed rule of June 10, 2026 defines "gaming" and sets a three-step test for event contracts. Broad sports contracts stay permitted under the proposal: final scores, point spreads, season-long stats, and tournament advancement. Contracts tied to injuries, officiating, single in-game plays, altercations, and pre-college events face a ban. The comment window closed July 27.
The CFTC's non-sports work centers on elections and market integrity. Election contracts have traded federally since a 2024 court ruling cleared Kalshi to list them, and the CFTC dropped its appeal in May 2025. On Sept. 22, 2026, CFTC staff flagged "mention" contracts, which pay out on whether a person says a specific word, as open to manipulation. The agency is also prosecuting insider trading on these markets, and Congress is weighing the McCormick-Gillibrand Prediction Market Act of 2026 (S. 4469), which targets insider trading by officials.
| Date | CFTC action |
|---|---|
| Sept. 28, 2026 | Sends two rules to the White House: one defining "swap" to include event contracts, one excluding traditional gaming products such as slots and table games. Texts not public; neither in force |
| Sept. 22, 2026 | Staff guidance flags "mention" contracts as open to manipulation |
| Aug. 11, 2026 | Uses emergency powers to order Kalshi to keep operating in New York |
| July 24, 2026 | Second advisory of the year against broad, template-style self-certifications |
| July 14, 2026 | Orders Kalshi to settle open Michigan trades, overriding a state order |
| June 10, 2026 | Proposes the "gaming" definition and three-step test |
The agency is also prosecuting insider-trading cases, including one against a US soldier charged over Polymarket trades tied to a US military operation involving Venezuela's Nicolás Maduro. The soldier has moved to dismiss, arguing the contracts were not swaps.
How It Will All End Up
The Supreme Court is positioned to settle it, and three petitions are already pending. None has been acted on, and the earliest a ruling arrives is June 2027 if the Court takes a case this term.
Where the Courts Stand (October 7, 2026)
Three federal appeals courts have ruled, two more issued emergency orders only, and three cases are still waiting for a decision.
| Court | Case | Result | Date |
|---|---|---|---|
| Third Circuit | New Jersey | For Kalshi: sided with the platform at the early injunction stage | April 2026 |
| Ninth Circuit | Nevada | For the state, 3 to 0: sports contracts are likely not swaps, so state law applies. Kalshi asked the full court to rehear it | Aug. 28, 2026 |
| Sixth Circuit | Ohio and Tennessee | For the states: not swaps, and state law applies either way. Kalshi's deadline to ask for a rehearing is Oct. 9 | Sept. 25, 2026 |
| Fourth Circuit | Maryland | Argued May 7; no ruling | Pending |
| Second and Tenth Circuits | New York; Utah | Emergency requests only, both against Kalshi | 2026 |
| Seventh Circuit (lower courts) | Illinois; Wisconsin | Illinois for Kalshi, the CFTC, and Coinbase (Oct. 2); Wisconsin for the state (July), on appeal | Pending |
| Massachusetts Supreme Judicial Court | Massachusetts | Argued in May; no ruling | Pending |
The Supreme Court Petitions
Each petition asks the Court to settle whether federal law stops states from regulating sports contracts on CFTC-registered exchanges:
New Jersey v. KalshiEX (No. 26-299). New Jersey filed Sept. 2 after losing at the Third Circuit. Kalshi's response is due Nov. 9.
Robinhood Derivatives v. Dreitzer (No. 26-338). Robinhood filed Sept. 10, challenging the Ninth Circuit's Nevada ruling. Nevada's response is due Oct. 14.
Crypto.com v. Nevada (No. 26-344). Nevada's response is due Oct. 15.
The Court typically considers a petition a few weeks after the response arrives. If it agrees to hear a case this term, arguments take place in late winter or spring.
What Happens Next?
There are five realistic outcomes:
The Court takes a case - A ruling settles the split nationwide. Until then, states in the Ninth and Sixth Circuits enforce, and states in the Third Circuit do not.
The Court declines - The split holds, and access follows the map by circuit.
The CFTC rules land - New federal rules reshape which contracts are allowed, though Nevada argues the Ninth Circuit's holding rests on the statute's text and a rule change does not move it.
Congress acts - Senator Schiff's Prediction Markets Are Gambling Act (S. 4160) targets sports and other gaming-style contracts; the McCormick-Gillibrand Prediction Market Act of 2026 (S. 4469) targets insider trading by officials. Both sit in committee.
Platforms adapt - Operators obtain state gaming licenses for some activity, pull specific contracts in specific states, or keep running mainly under federal rules.
Prediction Markets Legal Timeline
This timeline tracks every major legal, regulatory, and industry event for prediction markets in the US, newest first, through October 7, 2026. It covers court rulings, state lawsuits, cease-and-desist orders, new state laws and taxes, CFTC actions, and bills in Congress.
Prediction market law changes weekly, and a single court order can change what traders in a state can access overnight. We update this timeline as new filings, rulings, and orders come in. Each entry gives the date and what changed, so you can see how the current map took shape and what moved most recently.
Oct. 2, 2026 - Judge Martha Pacold (N.D. Ill.) granted in part the preliminary injunction motions from Kalshi, Coinbase, the United States and the CFTC. Illinois cannot apply its sports-wagering licensing rules or related criminal provisions to the Kalshi-listed contracts at issue (championship-winner contracts). She found those contracts are likely swaps and held off on the challenge to Illinois' new 1.75% to 3.5% transaction fees. The parties must submit a proposed injunction by Oct. 29. This conflicts with the July Wisconsin ruling now before the Seventh Circuit, and it is a rare district-court win for the federal side after the Sixth Circuit loss. (source: N.D. Ill. order via CourtListener)
Early Oct. 2026 - Nevada, through Mayer Brown's Nicole Saharsky, told the Ninth Circuit not to delay ruling on Kalshi's en banc petition. Nevada argued the panel's no-swaps holding rests on the CEA's text, so a revised CFTC rule would not change the outcome.
Sept. 28, 2026 - OIRA received two CFTC submissions. RIN 3038-AF82 is a proposed rule, "Further Definition of 'Swap' to Include Event Contracts." RIN 3038-AF81 is an interim final rule, "Further Definition of 'Swap' to Exclude Casino-Style Gambling Products." Neither text has been published, and neither is in effect. (source: Reginfo.gov)
Sept. 25, 2026 - Kalshi sent a letter to the Ninth Circuit asking it to grant en banc rehearing in the Nevada case, or to hold the petition until the CFTC revises 17 CFR 40.11. The CFTC has said that revision is coming "within the next two months."
Sept. 25, 2026 - A unanimous Sixth Circuit panel ruled against Kalshi in consolidated appeals KalshiEX v. Schuler (Ohio) and KalshiEX v. Orgel (Tennessee). It held that Kalshi has not shown its sports contracts are swaps, and that even if they were, the CEA would not preempt either state's gambling laws.
Sept. 24, 2026 - New York AG Letitia James sued Polymarket in state court, alleging an unlicensed gambling operation and seeking an injunction, disgorgement, restitution and civil penalties. The same day, Polymarket sued James and other state officials in Manhattan federal court to block state regulation, arguing federal preemption. The AG's suit follows New York's July suit against Kalshi.
Sept. 22, 2026 - The Supreme Court granted Kalshi's request for a 30-day extension in Flaherty v. KalshiEX, moving its brief in opposition from Oct. 8 to Nov. 9. Kalshi filed the request on Sept. 18.
Sept. 22, 2026 - The CFTC's Division of Market Oversight issued a staff advisory saying contracts on what a named person says, attends or does may be presumed readily susceptible to manipulation. Exchanges will have to justify their safeguards contract by contract. It is not a rule or a ban.
Sept. 21, 2026 - Kalshi petitioned the Seventh Circuit (No. 26-8020) for permission to appeal the Wisconsin ruling that lets the Ho-Chunk Nation's IGRA claims proceed. This follows the district court's Sept. 11 certification.
Sept. 21, 2026 - The federal court in Montana entered an order dismissing KalshiEX v. Knudsen, on a joint stipulation filed Sept. 17. Montana agreed not to enforce against Kalshi's event contracts until the Ninth Circuit resolves the en banc petition in the Nevada case, and to give 30 days' notice before acting after that.
Sept. 2026 - Arizona AG Kris Mayes asked the Ninth Circuit to lift the injunction blocking her prosecution of Kalshi, arguing the Nevada ruling (Assad) controls. The CFTC conceded the injunction's reasoning cannot stand but asked the court to wait for the en banc decision. (source: Arizona Mirror, Prediction News)
Sept. 18, 2026 - Missouri's attorney general issued cease-and-desist letters to six prediction market operators (Polymarket, Kalshi, Crypto.com, Novig, Underdog and Robinhood), citing unlicensed sports wagering and age-verification gaps, with 30 days to comply.
Sept. 17, 2026 - The Ninth Circuit ruled for two California tribes, the Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians, holding Kalshi and Robinhood's sports event contracts on tribal land are likely illegal Class III gaming under the Indian Gaming Regulatory Act. The panel reversed the district court's denial of a preliminary injunction and remanded for further proceedings. This is a separate case from the Nevada ruling, resting on tribal gaming law rather than CEA preemption.
Sept. 16, 2026 - Underdog sued Connecticut officials in federal court to block the state's Sept. 10 cease-and-desist order, its sixth state lawsuit this month after suing Massachusetts, Ohio, Wisconsin, New Mexico and Washington on Sept. 8.
Sept. 11, 2026 - The Supreme Court formally docketed Robinhood's cert petition as No. 26-338 (Robinhood Derivatives v. Dreitzer; Nevada's response due Oct. 14) and Crypto.com's as No. 26-344 (NADEX/Crypto.com v. Nevada; Nevada's response due Oct. 15), giving both petitions reported last week actual docket numbers and deadlines.
Sept. 11, 2026 - A federal judge in Wisconsin (Judge William Conley) certified an interlocutory appeal to the Seventh Circuit in Ho-Chunk Nation v. Kalshi, letting a tribal-gaming challenge proceed to that circuit.
Sept. 11, 2026 - Crypto.com, through its exchange NADEX, petitioned the U.S. Supreme Court to review the Ninth Circuit's Nevada ruling (No. 26-344), becoming the third party to seek review of the sports-event-contract question.
Sept. 11, 2026 - North American Derivatives Exchange (NADEX) filed its own petition for certiorari on the same Ninth Circuit ruling.
Sept. 10, 2026 - Connecticut issued cease-and-desist orders to nine prediction platforms (Polymarket, Coinbase, Crypto.com, Robinhood, ProphetX, Novig, Webull, Gemini, and Underdog Predict) and nearly 30 subpoenas to payment processors, app stores, and media, ordering them to stop offering sports event contracts to state residents.
Sept. 9, 2026 - Kalshi petitioned the full Ninth Circuit for an en banc rehearing of the Nevada ruling rather than going to the Supreme Court, arguing the panel decision created a circuit split.
Sept. 9, 2026 - Robinhood filed a petition for certiorari asking the Supreme Court to review the same Ninth Circuit ruling.
Sept. 8, 2026 - The Tenth Circuit denied Kalshi's emergency motion for an injunction pending appeal, clearing Utah to enforce its gambling laws against sports event contracts.
Sept. 4, 2026 - A federal judge in the Western District of Michigan signed a stipulation and order under which Robinhood agreed to stop offering new sports event contracts to Michigan customers and close open positions by Oct. 9, making it the second platform pulled from the state after Kalshi.
Sept. 2, 2026 - New Jersey's attorney general filed a petition asking the U.S. Supreme Court to decide whether states can enforce gambling laws against Kalshi's sports event contracts.
Sept. 1, 2026 - An Ingham County judge granted Michigan a preliminary injunction barring Kalshi from offering sports event contracts, requiring geofencing through a state-licensed provider and a $500,000 daily fine for violations.
Aug. 31, 2026 - New York Attorney General Letitia James asked the Southern District of New York to disregard the CFTC's Aug. 11 emergency order, arguing it merely restated legal arguments that multiple courts had already rejected.
Aug. 31, 2026 - Kalshi suspended Republican U.S. House candidate Laurie Buckhout for three years after finding she traded contracts tied to her own congressional race.
Aug. 28, 2026 - The 9th U.S. Circuit Court of Appeals ruled that Kalshi's sports event contracts are likely bets rather than federally regulated swaps, upholding Nevada's authority to regulate the platform and setting up a possible Supreme Court fight.
Aug. 25, 2026 - Kalshi announced multi-year marketing partnerships with five MLB teams: the Atlanta Braves, Boston Red Sox, Los Angeles Dodgers, San Diego Padres and San Francisco Giants.
Aug. 18, 2026 - Kalshi filed with regulators to launch perpetual futures contracts tied to equity indexes such as the S&P 500, putting it in direct competition with traditional futures exchanges.
Aug. 11, 2026 - The CFTC invoked emergency powers to order Kalshi to keep operating in New York, blocking the state's attempt to shut it down while a gambling law lawsuit continues.
Aug. 9, 2026 - Kalshi said it has built internal surveillance systems to flag suspicious trading and is referring suspected insider trading cases, including some tied to Washington, to federal authorities.
Aug. 7, 2026 - The CFTC warned prediction market platforms against advertising or structuring contracts using American-style casino betting odds.
Aug. 7, 2026 - Trump Media & Technology Group ended its year-long token and prediction market partnership with Crypto.com, including a shelved plan to bring prediction contracts to Truth Social.
Aug. 7, 2026 - DraftKings said Prediction trading volume grew nearly fivefold between April and July, with CEO Jason Robins calling the growth faster than expected.
Aug. 6, 2026 - The New York Yankees named Polymarket the team's official prediction market partner, giving it signage inside Yankee Stadium through the rest of the 2026 season.
Aug. 5, 2026 - CME Group and FanDuel are scaling back their joint prediction market venture, with FanDuel moving its sports event contracts to a new exchange partner, Crypto.com.
Aug. 5, 2026 - Genius Sports signed separate official data, integrity and marketing partnerships with Kalshi and Polymarket, marking its entry into prediction markets.
Aug. 4, 2026 - A federal judge in Utah granted summary judgment to the state, ruling the Commodity Exchange Act does not preempt Utah's gambling laws; it is the first final merits ruling in the state-versus-federal fight, and Kalshi has said it will appeal to the Tenth Circuit.
July 31, 2026 - New York Attorney General Letitia James sued Kalshi, alleging its prediction market platform operates as an unlicensed, illegal gambling business under state law and seeking fines and restitution for affected users.
July 29, 2026 - Robinhood reported second-quarter revenue of $156 million from prediction markets, more than 10 times the year-ago figure and enough to surpass its crypto trading revenue for the first time.
July 27, 2026 - A federal judge temporarily blocked Minnesota from enforcing its law banning prediction market platforms, ruling that federal law likely preempts the state ban five days before it was set to take effect. Kalshi and Polymarket were parties to the case.
July 27, 2026 - Fanatics agreed to acquire a CFTC-registered exchange and clearinghouse from BGC Group, giving Fanatics Markets in-house infrastructure to launch and settle its own prediction market contracts.
July 24, 2026 - Robinhood held talks with Crypto.com about integrating Crypto.com's prediction market system into the Robinhood app, according to a Wall Street Journal report.
July 24, 2026 - The CFTC issued its second advisory of the year warning designated contract markets against submitting broad, template-style self-certifications for event contract series.
July 22, 2026 - CME Group CEO Terry Duffy said on the company's second-quarter earnings call that many sports prediction markets amount to gambling and predicted the dispute will eventually reach the U.S. Supreme Court.
July 14, 2026 - The CFTC stayed an emergency rule filed by Kalshi and used its emergency authority to order the company to fulfill open trades involving Michigan residents, rejecting a Michigan court order that had directed Kalshi to cancel those trades.
July 9, 2026 - Polymarket filed an application with the National Futures Association to operate as a futures commission merchant, a step toward offering margin trading to U.S. users.
July 8, 2026 - A federal judge denied Kalshi's request for a preliminary injunction against New York regulators, ruling that state gambling laws aren't preempted by federal commodities law; Kalshi has appealed to the 2nd U.S. Circuit Court of Appeals.
July 7, 2026 - North Carolina Gov. Josh Stein signed a state budget that adds a 6% tax on prediction market trading fees while explicitly allowing CFTC-registered platforms to operate in the state.
July 7, 2026 - Prospect Markets signed a letter of intent with Crypto.com-backed Foris DAX FCM LLC, doing business as OG Broker, to launch a sports-focused prediction market in the U.S. by the third quarter of 2026.
July 6, 2026 - Law firm Jenner & Block withdrew from representing CME Group's Chicago Mercantile Exchange in its lawsuit against the CFTC over the agency's decision to let Kalshi and Coinbase offer perpetual futures, citing unspecified conflicts with other clients.
July 3, 2026 - The Michigan Gaming Control Board withdrew from the National Council on Problem Gambling over the group's partnership with Kalshi, days after a Michigan court ordered Kalshi to stop offering sports-event contracts in the state.
July 1, 2026 - Spotify removed streams of Malcolm Todd's song "Earrings" from its charts after identifying suspicious betting activity tied to the song on Kalshi.
June 30, 2026 - Polymarket sued New Mexico's attorney general and Gaming Control Board in federal court, arguing it faced imminent enforcement risk after the state sued rival Kalshi in June.
June 30, 2026 - Kalshi sued the Ohio Casino Control Commission in state court, arguing the regulator's proposed $5 million civil penalty violates its right to a jury trial under the Ohio Constitution.
June 26, 2026 - New Jersey's solicitor general asks the U.S. Supreme Court for more time to file a petition seeking review of the Third Circuit ruling that shields Kalshi's sports event contracts from state enforcement.
June 24, 2026 - Kalshi is reportedly in talks to raise new funding at a $40 billion valuation, nearly double the mark it set seven weeks earlier.
June 23, 2026 - The CFTC sues Kentucky, its ninth state lawsuit since April and the first against a state with a Republican attorney general, seeking to block the state's enforcement actions and a new tax on prediction-market transaction fees.
June 19, 2026 - Kalshi's annualized revenue reportedly crosses $2 billion at a $22 billion valuation, with monthly trading volume near $16.8 billion.
June 17, 2026 - Kentucky Attorney General Russell Coleman sues Kalshi, Polymarket, and sweepstakes-casino operator VGW Holdings, alleging the platforms are running unlicensed sportsbooks.
June 12, 2026 - The Coalition for Fair Markets, a trade group representing Kalshi, Crypto.com, and Polymarket, sues Kentucky's attorney general over the state's new prediction-market tax, calling it discriminatory.
June 10, 2026 - The CFTC releases a 267-page proposed rule for prediction markets and opens a 45-day comment period; the framework would allow most sports-related event contracts but ban those tied to player injuries, officiating decisions, in-game incidents, and acts of war or terrorism.
May 28, 2026 - Kalshi files its own federal lawsuit against Minnesota, arguing the state's new ban violates the Supremacy Clause and the company's First Amendment rights.
May 27, 2026 - Federal prosecutors charge Google security engineer Michele Spagnuolo with insider trading after he allegedly used internal search data to make $1.2 million betting on Polymarket's "Year in Search" markets.
May 24, 2026 - A New York Times investigation reports that senior CFTC officials who raised concerns about Polymarket, Crypto.com, and a Gemini affiliate were suspended, investigated, or pushed out of the agency.
May 19, 2026 - Minnesota Gov. Tim Walz signs the nation's first law banning prediction markets outright, making it a felony to operate or advertise platforms like Kalshi and Polymarket in the state starting Aug. 1; the CFTC sues to block it the next day.
May 11, 2026 - A federal judge in Arizona rules that federal law preempts state gambling law as applied to prediction markets, granting Kalshi injunctive relief in the state.
May 7, 2026 - Kalshi closes a $1 billion Series F round at a $22 billion valuation, led by Coatue with Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley, and ARK Invest.
May 7, 2026 - The Fourth Circuit hears oral arguments in Kalshi's appeal of a Maryland federal court's refusal to block the state's gambling laws.
May 4, 2026 - The Massachusetts Supreme Judicial Court hears oral arguments in the state's case against Kalshi, with justices voicing skepticism toward the company's claim that its sports contracts differ meaningfully from sports betting.
Apr. 30, 2026 - The public comment period closes on the CFTC's advance notice of proposed rulemaking on prediction markets.
Apr. 24, 2026 - The CFTC and a coalition of 38 state attorneys general file competing amicus briefs on the same day at the Massachusetts Supreme Judicial Court, arguing opposite sides of the state-versus-federal jurisdiction question.
Apr. 24, 2026 - The Sixth Circuit refused to pause Ohio's enforcement against Kalshi while its appeal proceeds, calling the underlying questions close but fast-tracking the case.
Apr. 23, 2026 - Federal prosecutors charge U.S. Army Special Forces Master Sgt. Gannon Ken Van Dyke with insider trading after he allegedly used classified information about the raid that captured Venezuelan leader Nicolás Maduro to make more than $400,000 on Polymarket.
Apr. 16, 2026 - The Ninth Circuit hears consolidated oral arguments in prediction-market cases involving Kalshi, Robinhood, and Crypto.com.
Apr. 14, 2026 - The Ohio Casino Control Commission issued notice of a $5 million fine against Kalshi for offering unlicensed sports gaming, citing the state's 20% gaming tax, age verification, and advertising rules.
Apr. 6, 2026 - The Third Circuit becomes the first federal appeals court to rule on the issue, affirming a preliminary injunction that bars New Jersey from enforcing its gambling laws against Kalshi's sports event contracts.
Apr. 2, 2026 - The United States and the CFTC file simultaneous lawsuits against Arizona, Connecticut, and Illinois, arguing the Commodity Exchange Act preempts state enforcement against federally regulated prediction markets.
Apr. 2026 - Illinois Gov. JB Pritzker signs an executive order barring state officials and employees from trading on prediction markets using confidential information.
Apr. 2026 - Kentucky enacts a 14.25% excise tax on prediction-market transaction fees, set to take effect Jan. 1, 2027, and a separate measure barring licensed sportsbooks from partnering with prediction-market platforms starting July 15, 2026.
Mar. 27, 2026 - ICE completes a $600 million cash investment in Polymarket, closing out the $2 billion commitment it first announced in October 2025.
Mar. 23, 2026 - Sens. John Curtis (R-Utah) and Adam Schiff (D-Calif.) introduce the Prediction Markets Are Gambling Act, which would reclassify sports and casino-style event contracts as gambling outside CFTC jurisdiction.
Mar. 16, 2026 - The CFTC publishes an advance notice of proposed rulemaking on prediction markets.
March 2026 - A federal judge denied Kalshi a preliminary injunction against Ohio officials, writing that treating sports betting contracts as swaps would produce absurd results; Kalshi appealed to the Sixth Circuit.
March 2026 - The CFTC issues a staff advisory stating that event contracts must not be "readily susceptible to manipulation" and that exchanges must conduct real-time monitoring.
March 2026 - Arizona's attorney general files 20 criminal misdemeanor charges against Kalshi over its sports and election event contracts.
Feb. 19, 2026 - A federal judge in the Middle District of Tennessee grants Kalshi a preliminary injunction blocking the state from enforcing its gambling laws against the platform's sports event contracts.
Feb. 18, 2026 - A Massachusetts appeals court grants Kalshi a stay of the state's Jan. 20 injunction while the case proceeds to the Supreme Judicial Court.
Feb. 12, 2026 - The Federal Reserve publishes a paper finding that prediction-market prices forecast Fed rate moves on par with or better than Bloomberg consensus, the New York Fed survey, and fed funds futures.
February 2026 - The CFTC withdraws its June 2024 proposed rulemaking and September 2025 staff advisory on event contracts; ICE separately launches a Polymarket Signals and Sentiment tool for institutional data customers.
February 2026 - Kalshi sued Utah in federal court seeking to block enforcement of the state's gambling ban, filing as Utah prepared legislation aimed at keeping prediction markets out.
Jan. 29, 2026 - CFTC Chairman Michael Selig announces the agency will move forward with formal prediction-market rulemaking, scrapping an earlier proposal that would have barred sports and political event contracts.
Jan. 27, 2026 - The Illinois Gaming Board sends Polymarket US a cease-and-desist letter, following earlier letters to Kalshi, Crypto.com, and Robinhood in April 2025.
Jan. 20-23, 2026 - A Massachusetts Superior Court judge grants the state's motion for a preliminary injunction against Kalshi, the first court order of its kind against a prediction-market platform, and orders it to geofence Massachusetts residents by Jan. 23.
Jan. 9, 2026 - Kalshi says it has surpassed $100 billion in annualized trading volume.
Jan. 7, 2026 - Polymarket and Dow Jones announce an exclusive data partnership putting prediction-market probabilities into the Wall Street Journal, Barron's, MarketWatch, and Investor's Business Daily.
Dec. 22, 2025 - FanDuel and CME Group launch FanDuel Predicts in five states, following DraftKings Predictions and Fanatics Markets into the standalone prediction-market space.
Dec. 2, 2025 - Polymarket officially reopens to US customers after receiving an amended CFTC order of designation, ending a ban that had been in place since 2022.
Oct. 7, 2025 - ICE, the parent company of the New York Stock Exchange, announces a strategic investment of up to $2 billion in Polymarket at an approximate $8 billion pre-investment valuation.
September 2025 - Massachusetts Attorney General Andrea Campbell sues Kalshi in state court, becoming the first state to sue a prediction-market operator over sports event contracts.
September 2025 - The CFTC issues a staff advisory stating that sports event contracts had been listed "pursuant to self-certifications," and that the agency had not yet determined whether such contracts involve activity prohibited under the Commodity Exchange Act.
July 2025 - The DOJ and CFTC close their investigations into Polymarket without bringing charges, and the company acquires QCX LLC, a CFTC-licensed exchange, for $112 million to build a compliant path back into the US market.
April 2025 - The Illinois Gaming Board sends cease-and-desist letters to Kalshi, Crypto.com, and Robinhood over sports and political event contracts offered without a state gaming license.
March 2025 - New Jersey's Division of Gaming Enforcement sends Kalshi a cease-and-desist letter, the first state action against the company's sports event contracts and the origin of the case that later reached the Third Circuit.
February 2025 - CFTC Acting Chair Caroline Pham says the agency's existing interpretations of event contracts are "a sinkhole of legal uncertainty," signaling a more permissive federal stance toward prediction markets.
January 2025 - Kalshi and other CFTC-regulated exchanges begin offering sports-related event contracts for the first time, following a change in agency leadership.
Sept. 6, 2024 - A federal court rules the CFTC exceeded its authority by blocking Kalshi's election-outcome contracts; the CFTC drops its appeal the following May, cementing the win and signaling a more permissive federal posture toward event contracts generally.
Jan. 3, 2022 - The CFTC fines Polymarket $1.4 million and bars it from serving US customers after ruling it operated as an unregistered derivatives exchange, a ban that holds until its US relaunch in late 2025.
November 2020 - The CFTC designates Kalshi as a registered exchange, making it the first federally regulated platform to offer retail event contracts.
Responsible Trading
Trading event contracts carries real financial risk, and the main consumer-protection body treats it seriously. The National Council on Problem Gambling (NCPG) calls the activity "functionally gambling, regardless of how it is legally defined" and recommends a minimum age of 21, spending limits, and visible helpline access. The National Problem Gambling Helpline is 1-800-MY-RESET (call or text; chat at 1800myreset.org).
Four facts stand out for anyone moving over from state-licensed operators:
Age gap - Prediction markets allow traders 18 and older, while most state-licensed operators require 21. The NBA, PGA Tour, and NCAA have asked for a 21 minimum.
Fewer state protections - Michigan's regulator argues Kalshi operates outside state rules on age verification, self-exclusion, and deposit limits.
Financial framing - NCPG warns that words like "trading" and "positions" lead some people who never think of themselves as gamblers to miss the warning signs.
Frequency risk - Research cited by NCPG finds weekly traders report problem indicators at roughly twice the rate of the general population.
Kalshi offers trading breaks, permanent self-exclusion, monthly deposit limits, mental health support through Birches Health and two-factor authentication. Polymarket has no built-in responsible trading tools, so users set their own limits.
If trading stops being fun, free and confidential help is available. Call or text the National Problem Gambling Helpline at 1-800-MY-RESET, or chat at 1800myreset.org. Other support groups include Gamblers Anonymous, Gam-Anon for family members, and SMART Recovery.
Are Prediction Markets Legal FAQ
Are prediction markets considered gambling?
Who regulates prediction markets?
Do prediction markets need a state license?
Is Polymarket legal in the US?
Are prediction markets legal in states without legal sports betting?
Are election contracts legal?
Do state bans cover politics and other non-sports contracts?
How old do you have to be to use a prediction market?
Are prediction market winnings taxable?
What happens if the Supreme Court sides with the states?
Can prediction market users be prosecuted?
Popular Prediction Markets per State Overview
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