What Is a Prediction Market and How It Works

Event Trading Hidden Costs

Market Prices as Probabilities

Prediction Markets vs Sportsbooks

Event Contracts Explained

Kalshi vs Robinhood Markets

Kalshi vs Polymarket Apps

US prediction market legality

What are prediction markets?

Like we briefly noted in the introduction paragraph above, prediction markets are sites or apps where you can sign up to buy and sell yes or no contracts that are tied to a wide variety of real life events.

On most prediction markets, users get access to trade on outcomes tied to events like elections, crypto price movements, music, as well as lifestyle. For instance, while crafting our Kalshi vs Polymarket review, we figured the two sites offer contracts on elections, music, and even lifestyle.

If you wish to trade on crypto price movements for instance, you’ll find questions like will Bitcoin cross the $160, 000 mark before May? If you purchase the “Yes” shares, it means you believe the event will come to pass. If the event comes to pass, you’ll take profit, which is determined by your purchase amount.

That’s not all, the two sites also cover contacts from other real life events. Apart from these two, there are also other top-rated prediction markets that you can use in the US and they are all featured on the banners of this page.

However, before signing up for any of them, you’ll need to be up to 18 years old, which is the legal required age to jump on most of them. You’ll need to prove this by completing a compulsory age and identity verification before getting access.

What are the top prediction market sites in August 2026

This is the question that most traders ask before signing up for any platform, and their answer can vary depending on how they like to trade. What we can do is suggest a place to start looking at the welcome offers, market coverage, availability, and dedicated apps. Here are our recommended prediction markets for trading event contracts.

Polymarket - Best market coverage for traders

Polymarket: Pros and Cons

• Provides hundreds of event contracts
• Features an Android and iOS app
• Supports multiple cryptocurrencies

• Services are limited in the US

Polymarket is one of the largest prediction markets, and they claim this fact in their slogan. Polymarket has recently had a return to the US in December 2025 after acquiring a CFTC-licensed exchange, and the market count has exploded since, with thousands of active markets covering politics, crypto, culture, sports, and just about anything else people argue about.

New traders at Polymarket can get themselves a welcome offer of "Deposit $20, Get $50 in bonus trades" after they have signed up and verified their account. You can make deposits to fund your balance using USDC on the Polygon blockchain, though Visa and Mastercard deposits are also accepted for anyone who'd rather skip the crypto wallet setup.

The app is available on iOS and Android, or you can just use a desktop or mobile browser if you don't feel like downloading anything. Polymarket is available across most of the US, but we would recommend checking your state's regulation status, as some event contact types like sports and politics are sometimes restricted in some states. If you want the largest selection of prediction markets across the US, then Polymarket is worth a pit stop.

Robinhood -  Top choice for traders who want more than predictions

Robinhood: Pros and Cons

• Free stocks welcome bonus
• Available downloadable app
• Coverage of over 1600 events

• Limited climate markets

Robinhood folded event contracts into its existing brokerage app rather than building something separate, so if you already trade stocks there, predictions show up in the same dashboard, making it a one-stop shop for those who want to trade beyond prediction markets.

When it comes to markets, they have the same coverage as the bigger names out there, with politics, sports, economics, culture, weather, and more, all backed by Robinhood Derivatives, which settles trades through partners like KalshiEX, ForecastEX, or Rothera Exchange and Clearing, all with CFTC backing.

Robinhood has a sign-up bonus for its platform, but unfortunately, it can't be used to fund or trade event contracts directly. Funding works exactly like the rest of your Robinhood account if you have one, with payments and withdrawals through ACH, instant transfer, or major debit cards, no crypto wallet needed. Overall, the prediction markets at Robinhood were more impressive than expected from a trading exchange and are worth checking out.

Pros and cons of using a prediction markets

No doubt, most prediction markets give you the chance to trade on different real life events. However, that doesn’t mean they are perfect. In fact, here are some of their pros and cons that we’ve noticed:

Are prediction markets legal in the US?

While prediction markets are legal in the US, their availability depends on how they are structured. Some of them, especially all the ones we recommend on the banners of this page operate under strict regulations from bodies like the Commodity Futures Trading Commission( CFTC).

That way, they must follow specific rules set by the body, in order to offer event-based contracts legally. Having said that, it’s worth noting that prediction markets who currently don’t have a license from the CFTC are not allowed to accept users within the shores of the US.

Getting started at prediction markets – A step-by-step guide

Now that you’ve learned a thing or two about prediction markets, you may want to give them a try. If that’s true, the following steps will be quite helpful:

1. Tap any of the the banners plastered on this page to visit a trusted prediction site

2. Once the page loads, provide all the required personal info

3. Complete your email verification

4. Verify your identity

5. Make your first deposit

6. Head to the prediction market

7. Choose your preferred prediction market

8. Choose a question

9. Purchase either a “yes” or “no” market

10. Complete the transaction and wait for the event to conclude

Understanding how prices work on prediction markets

The logic behind prices of shares is not really a difficult one. By being influenced by the forces of demand and supply, the prices of shares are not controlled by any market. This means most shares start with prices as low as $0.1.

From there, the more readers buy into that particular market, the higher the price will be. This means if you see a particular contract selling at $0.50 per share, it’s an indication that about 50% of traders believe that the outcome will come to pass.

So, for those who want to learn how to read market prices, we hope this simple explanation helps.

Overview of prediction markets and how they operate

Before rounding up, here’s an overview of prediction markets and how they operate:

Learn More About Prediction Markets Through Our Detailed Guides

 Need more context before comparing prediction market sites? The prediction market guides below explain how they work, how event contracts are structured, how to read market prices, and how major platforms compare. Use them to understand the basics before choosing where to trade.

Our final on prediction markets and how they operate

At the end of the day, predictions are growing in popularity as the days go by. However, you don’t understand how they operate or what they bring to the table, we’ve covered everything you need to know about them in this guide.

From how they operate to how to get started, this guide has all the details that you need. If you’ve gone through it and are ready to jump into action, you’ll find the registration links of our top-rated prediction markets plastered on the banners of this page.

The most trusted prediction sites in August

Prediction markets FAQs