Are prediction markets legal in United States?
Kalshi operates as a CFTC-regulated designated contract market and is fully legal nationwide. Polymarket settled with the CFTC in 2022 and currently blocks US IP addresses; US residents using VPNs to access it do so against the platform's terms. Manifold uses play money and is unrestricted.
- Regulator
- CFTC (Commodity Futures Trading Commission)
Detailed overview
Prediction markets in the United States exist in a uniquely bifurcated legal landscape. Kalshi, founded in 2018, became the first federally regulated prediction-market exchange after a multi-year CFTC approval process. It operates as a Designated Contract Market (DCM) — the same regulatory category as CME and ICE — which makes it fully legal in every US state and territory. Polymarket, by contrast, settled with the CFTC for $1.4 million in January 2022 over unregistered swaps activity and now geo-blocks all US IP addresses. Manifold Markets uses internal play-money credits and is therefore unrestricted.
Frequently asked questions
Is Polymarket legal in the United States?
Polymarket is not available to US residents. It geo-blocks US IPs following a 2022 CFTC settlement. Accessing it via VPN violates the platform's terms of service.
Is Kalshi legal in the US?
Yes. Kalshi is a CFTC-regulated designated contract market and is legal in all 50 US states.
Do I owe taxes on prediction-market winnings?
Yes. The IRS treats prediction-market profits as ordinary income or capital gains depending on holding period. Kalshi issues 1099 forms for taxable activity.
This page is editorial information, not legal advice. Regulations change frequently. Consult a qualified lawyer in your jurisdiction before trading.