Are Prediction Markets Legal in the United States

What are prediction markets and how do they work?

Prediction markets are very easy to understand once you get a hang of them. As briefly mentioned in our Kalshi vs Polymarket guide, they are sites where you can trade on the outcome of real-world events using “yes” or “no” shares.

Instead of wagering against a bookmaker, as it is usually done on betting sites, you’re basically trading based on what you think will happen, interesting right? Most reputable prediction markets, especially our recommended ones, offer contracts tied to events like economy, sports, crypto prices, culture, and even music.

If you prefer crypto price movements, for instance, you’ll find questions like: Will Bitcoin beat the $160,000 mark before June of 2026? If you believe the event can happen, then you can buy the “yes” contract. If you believe it won’t happen, you can buy the “no” contract.

These shares usually cost between $0.1 to $0.99, depending on how likely people think the event will come to pass. If the outcome you invested into turns out to be correct, your share price will settle at $1.

That means if you purchase about 1000 shares, you’ll get a total of $1000. However, your profit will depend on the amount at which you bought the contract. If the contract was purchased at $0.5 per share, then you must have made a $500 profit.

Are prediction markets legal in the US?

Yes, prediction markets are legal in the US. However, this doesn’t mean any brand can just stand up to start operating without being licensed. As a regulated market, any company that wishes to give users the access to trade on real life events must go through appropriate bodies.

In the US, they must first register and get approval from the Commodity Futures Trading Commission before offering such services. Doing this ensures that the said brand follows strict rules around transparency, fairness, and user protection.

The absence of a license from the CFTC is one of the many reasons why some popular prediction markets are not available in the US.

What are the best legitimate prediction markets right now?

Finding a CTFC regulated prediction market is important if you want to trade on real-world outcomes, and we have done the research to give our suggestion on what we think are the best legitimate prediction markets right now. These are prediction markets that are available across a majority of US states, offer bonuses, a wide range of payment options, and have deep coverage of CTFC regulated event contracts to trade.

Kalshi - Best selection of CTFC regulated prediction markets

Kalshi: Pros & Cons

• The prediction market is easy to understand
• Prices are updated in real time
• Multiple reward programs

• No instant customer service replies

Kalshi operates as a CFTC-registered exchange, which means every contract clears through federal rules rather than an offshore setup. That federal backing covers the full range of what Kalshi offers, sports, politics, economics, crypto, and basically most things that traders have an opinion on the real-world outcome.

New traders can get themselves a welcome offer of "Trade $10, get $10 in bonus trades" after they have signed up and verified their account. To make your initial trade, you can fund an account through bank transfer, debit card, Apple Pay, wire, or USDC if you'd rather stay in crypto. Everything can be done straight through the iOS and Android app that runs seamlessly.

Kalshi is available in most states right now, though a few have their own restrictions in place surrounding certain markets like sports, so it's worth a quick check of the eligibility in your state before funding an account. If you would like to check out a CFTC regulated platform with a massive selection of markets, then Kalshi is worth a look.

Crypto.com - Best for crypto traders who want to trade predictions

Crypto.com: Pros and Cons

• Dedicated mobile app
• Several categories for prediction trading
• Fiat and crypto options

• No prediction market welcome bonus

Crypto.com is a finacial platform forst and a prediction market second but if your already trading crypto it has that all under the one app with no need to shift between wallets. Crypto.com has been running most of its predictions through its dedicated prediction market OG.com, but still covers a wide range of markets on its app.

Both sites are registered with the CFTC as designated contract markets, so you're trading on the same federally regulated footing as the bigger names in the space. Contracts cover crypto, financials, companies, economics, climate, and culture, all accessible through the app you'd already have installed. The app is available on both iOS and Android and runs smoothly with no lag and simple navigation with just a tap.

Crypto.com's prediction markets are available in most states, with a few exceptions of available markets in selected states when it comes to sports, so check current availability before you create an account specifically for trading. If yyour already trading crypto and want to trade event contracts on the side then Crypto.com has got you covered.

Pros and cons of the prediction markets’ legality in the US

So far, here are some of the pros and cons of the prediction markets’ legality that we’ve noticed:

Pros and Cons

• Provide a safe trading environment
• Protects traders through strict compliance
• Builds trust in licensed brands

• Bureaucratic delays with license issuance

Who regulates the prediction markets in the US?

Like we said briefly above, prediction markets are licensed and regulated in the US by the Commodity Futures Trading Commission. In case you don’t know, this body is a federal regulatory agency that is responsible for overseeing derivative markets, including event-based contracts offered on prediction sites.

In case you are wondering what events-based contracts are, they are simple agreements where users trade based on whether a specific real-world event will happen or not. For example, a contract might ask: Will inflation drop below 3% this year?

As a trader, you can either choose a “yes” or “no” contract, depending on what you believe will happen. Back to the discussion about CFTC, the body ensures that prediction markets operate fairly while also following strict rules.

This includes checking that the brands are transparent in their pricing, protecting user funds, and preventing fraud or manipulation.

A snapshot of the prediction markets’ legality in the US

Before we round up, here’s a table summarizing all that we’ve discussed so far:

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.

Final thoughts on prediction markets legality in the US

In conclusion, prediction markets are legally allowed to operate in the US. This means if you’re at least 18 years old, you can sign up for an account on your preferred site to start trading. However, to ensure your safety and protection, make sure to only trade on markets that are licensed and regulated by the CFTC.

Or better still, you can sign up for an account with any of the brands listed on banners of this page. They are fast and easy to use, so you won’t run into any issues. Once ready, you’ll find their registration links plastered on the banners of this page.

The most reliable prediction sites in August

Prediction markets legality FAQs