Are prediction markets legal in the US? Polymarket & Kalshi by state
By TomorrowAlpha Editorial Desk · Published · Updated
Yes. Prediction markets are legal in the US when they run on a CFTC-regulated exchange. Kalshi (since 2020) and Polymarket US (since July 2025) are both CFTC Designated Contract Markets. Polymarket US is available in every state except Nevada. Kalshi works nationwide, but must block sports contracts in Nevada and Michigan under state court orders.
At a glance
- Federal regulator
- CFTC (Commodity Futures Trading Commission)
- Polymarket US
- Legal; all states except Nevada
- Kalshi
- Legal in all 50 states; sports contracts blocked in NV and MI
- Key open question
- Can states regulate sports event contracts? Circuit split; SCOTUS petition pending
Is Polymarket legal in the US?
Yes, since 2025. Polymarket was barred from US users after a January 2022 CFTC settlement ($1.4 million penalty against Blockratize Inc.). In 2025 it bought QCEX, a CFTC-licensed exchange and clearinghouse, for $112 million. The CFTC designated the exchange — QCX LLC, d/b/a Polymarket US — on 9 July 2025 and amended the designation on 24 November 2025. Trading opened in December 2025, and the iOS app rolled out from May 2026.
Polymarket US is a separate venue from the international crypto site polymarket.com. US residents must use Polymarket US; the international site still geo-blocks the US.
In which states is Polymarket legal?
Polymarket US says trading is available in all states except Nevada, where the state obtained a preliminary injunction on 29 May 2026. Several states are suing, but none had an operative statewide ban as of 12 October 2026. Eligibility is confirmed at sign-up for each account — some third-party lists show more excluded states, which Polymarket's own published position does not.
| State | Polymarket US | Kalshi | What's happening |
|---|---|---|---|
| Nevada | Not available | Sports, election & entertainment contracts blocked | State court injunctions (May 2026); Ninth Circuit ruled against Kalshi (28 Aug) |
| Michigan | Available | Sports contracts blocked | State injunction vs Kalshi signed 1 Sep 2026; Polymarket's federal bid denied (June) |
| New York | Available (lawsuit pending) | Available (lawsuit pending) | AG sued Polymarket 24 Sep 2026 and Kalshi 31 Jul 2026 |
| New Jersey | Available | Available | Third Circuit sided with Kalshi (6 Apr 2026); NJ petitioned Supreme Court |
| Ohio / Tennessee | Available | Available (rulings against Kalshi) | Sixth Circuit, 25 Sep 2026; Kalshi sought rehearing 9 Oct |
| Massachusetts | Available | Available | Sports injunction vs Kalshi stayed pending state supreme court |
| Maryland | Available | Available | Enforcement paused pending Fourth Circuit; Baltimore city suit pending |
| Wisconsin / Kentucky | Available (lawsuit pending) | Available (lawsuit pending) | AG suits filed April and June 2026 |
| Illinois | Available | Available | Federal court shielded specified Kalshi contracts (2 Oct 2026) |
| California, Virginia, Texas, Florida & all other states | Available | Available | No operative restriction |
Is Kalshi legal in all 50 states?
Kalshi is federally legal in all 50 states as a CFTC Designated Contract Market (since 3 November 2020), and non-sports markets — Fed decisions, CPI, elections, weather, AI releases — are available nationwide. The fight is over sports contracts: states argue they are unlicensed sports betting. As of October 2026 Kalshi must geofence sports contracts in Nevada and Michigan, and has lost key rulings in the Sixth and Ninth Circuits while winning in the Third Circuit.
Is Kalshi legal in Virginia? Yes — Virginia has no operative order against Kalshi or Polymarket US.
Why are prediction markets legal in the US?
Under the Commodity Exchange Act, an event contract listed on a CFTC-designated exchange is a federally regulated derivative (a 'swap' on an event), not a state-licensed bet. Kalshi won the right to list election contracts in federal court in 2024, which opened the door for the rest of the industry. States counter that sports contracts are economically identical to sports betting, which the CFTC Act doesn't pre-empt — that is the question now headed toward the Supreme Court.
What prediction markets are legal in the US?
- Kalshi — the largest US prediction market (~78% of tracked volume in Sept 2026).
- Polymarket US — CFTC-regulated since July 2025.
- Brokerage access — Robinhood, Coinbase, Crypto.com and others offer event contracts via regulated exchanges.
- Manifold Markets — play money only; legal everywhere.
How are prediction-market winnings taxed in the US?
Treatment is unsettled. Regulated exchanges may issue tax forms for reportable activity; many tax advisers treat event-contract gains as ordinary or capital gains rather than gambling winnings, but the IRS has not issued specific guidance. Talk to a tax professional.
Frequently asked questions
Is Polymarket legal in the US?
Yes. Polymarket US (QCX LLC) has been a CFTC-designated contract market since 9 July 2025 and is available in every state except Nevada. The international polymarket.com site still blocks US users.
In what states is Polymarket legal?
All US states except Nevada, according to Polymarket US. New York, Wisconsin, Kentucky and Baltimore have lawsuits pending, but none had produced a statewide ban by 12 October 2026.
Are prediction markets legal in the US?
Yes, when offered on a CFTC-regulated exchange such as Kalshi or Polymarket US. States are contesting sports event contracts specifically.
Is Kalshi legal in all 50 states?
Kalshi is federally regulated and available in all 50 states, but state court orders require it to block sports contracts in Nevada and Michigan.
Is Polymarket legal in California?
Yes. California has no operative order against Polymarket US or Kalshi as of October 2026.
Can I use a VPN to access polymarket.com from the US?
No. The international site prohibits US persons and VPN circumvention; US residents should use the regulated Polymarket US app.
Sources
Related guides
Editorial information, not legal or financial advice. Regulations change frequently — last verified 12 Oct 2026.