Prediction markets are federally legal in the United States, and contested in a growing list of states. As of 2 October 2026, the federal appeals courts have split on whether states can apply their gambling laws to sports event contracts on federally regulated exchanges: the Third Circuit sided with Kalshi in April 2026, and the Ninth and Sixth Circuits went the other way in August and September. The CFTC has sued several states to defend its jurisdiction, Minnesota passed the first outright state ban and a federal judge put it on hold, tribal nations have opened a separate challenge, and a bipartisan bill introduced in Congress in March 2026 would restrict sports contracts further. So the honest answer to whether prediction markets are legal in the US is: yes at the federal level, and at the state level it depends where you live and what you want to trade.
The conflict is structural. The Commodity Exchange Act gives the CFTC exclusive jurisdiction over transactions on designated contract markets, and Kalshi and Polymarket US are both CFTC-designated. Under the CFTC's reading, state gambling regulators have no authority over those contracts. Under the reading a growing number of states have advanced, states keep their traditional power to regulate gambling within their borders, whatever a platform calls its product. Courts have split on which reading wins.
This guide covers the federal framework, how Polymarket returned to the US, the state-by-state picture as of 2 October 2026, and what it means in practice. The law is moving quickly, so check the platform's own state availability before you trade. For a closer look at Kalshi state by state, see is Kalshi legal in all 50 states. Nothing here is legal or financial advice.
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The federal position
At the federal level, prediction markets operating as CFTC-designated contract markets are legal and regulated. Kalshi has held its designation since November 2020. Polymarket US runs on QCEX, the exchange Polymarket bought in July 2025, under an Amended Order of Designation the CFTC issued on 25 November 2025 (see the next section). Robinhood and Crypto.com also offer event contracts to US customers.
The CFTC's position is that event contracts on designated platforms are "swaps" under the Commodity Exchange Act and fall within its exclusive jurisdiction, so state gambling laws are preempted. In March 2026 it signed a Memorandum of Understanding with Major League Baseball, its first with a professional sports league, to share information on the integrity of baseball-related markets.
The state regulators disagree. Their argument, advanced in litigation across many states, is that federal preemption is narrower than the platforms claim, and that states' long-recognised authority to regulate gambling survives a federal designation.
Polymarket in the US
Polymarket's US story runs separately from Kalshi's. In January 2022 Polymarket settled with the CFTC for $1.4 million over offering event-based binary options without registering, wound down its US markets and blocked US users. It bought QCEX, a CFTC-licensed exchange and clearing house, for $112 million in July 2025. On 25 November 2025 the CFTC issued an Amended Order of Designation allowing Polymarket to operate an intermediated US exchange, which lets brokerages and futures commission merchants bring customers to it.
The US product reopened to customers in December 2025 behind an invite-only waitlist, sports first. In May 2026 Polymarket removed the waitlist and opened general signup on its iOS app. Signing up requires full identity verification, and accounts are funded by debit card, bank transfer (ACH) or wire, with no crypto wallet involved.
The offshore Polymarket, the crypto-based platform the rest of the world uses, is a separate product. It blocks US users, and using a VPN to reach it from the US breaches its terms. If you are in the US, Polymarket US is the version you can legally use. How Polymarket US's fees compare with Kalshi's is set out in Kalshi vs Polymarket fees.
The state-by-state picture
As of 2 October 2026, the main state actions against Kalshi, the most legally tested platform, are below. Polymarket US is a party in fewer of these cases, but it joined Kalshi and the CFTC in the Minnesota challenge, and the legal questions are the same for both.
- New Jersey. In a 2-1 decision on 6 April 2026, the Third Circuit became the first federal appeals court to rule on the question, affirming Kalshi's preliminary injunction and holding that sports event contracts on a CFTC-registered exchange are likely "swaps" whose regulation the Commodity Exchange Act reserves to the CFTC. Judge David Porter wrote the majority, joined by Judge Michael Chagares; Judge Jane Roth dissented, calling the products "virtually indistinguishable" from online sportsbook bets. On 2 September 2026 New Jersey asked the Supreme Court to review the decision, and the Court has not yet said whether it will.
- Nevada. A Ninth Circuit panel in March 2026 denied Kalshi's emergency motion for an administrative stay, clearing the way for state enforcement, and a state court injunction followed. On 28 August 2026 the Ninth Circuit ruled against Kalshi on its sports contracts, upholding the dissolution of the federal injunction it had won as far as those contracts go, and sent Nevada's challenge to its election contracts back to the district court; Kalshi has asked the full court to rehear the case. The bar in Nevada is a state court injunction covering sports, election and entertainment contracts rather than sports alone: a temporary restraining order on 20 March 2026, made a preliminary injunction on 28 April, which the Nevada Supreme Court declined to pause while Kalshi appeals. Under an agreement with the Nevada Gaming Control Board announced in July 2026, after regulators found Kalshi's own IP-based geofence porous, the platform runs a multi-source geofence supplied by GeoComply to enforce it.
- Massachusetts. A state court barred Kalshi's sports contracts in January 2026. That injunction is on hold while Kalshi appeals, and the Supreme Judicial Court heard the appeal on 4 May 2026. As of 2 October 2026 it had not ruled.
- Tennessee. The federal District Court granted Kalshi a preliminary injunction, finding its contracts likely are swaps and state law likely is preempted. On 25 September 2026 the Sixth Circuit vacated that injunction, holding that Kalshi had not shown its sports contracts are swaps and, in the alternative, that federal law does not preempt Tennessee's gambling laws.
- Ohio. The federal District Court denied Kalshi's motion for a preliminary injunction, siding with state regulators, and on 25 September 2026 the Sixth Circuit affirmed.
- Utah. A federal judge refused Kalshi a preliminary injunction in August 2026, and in September the Tenth Circuit refused its emergency request to block enforcement while it appeals.
- Washington. In August 2026 a King County Superior Court judge ordered Kalshi to stop offering contracts on sports, elections, politics, entertainment, culture and technology to people in Washington. Contracts on commodities, climate, economics and finance are not covered by the order.
- Michigan. In early September 2026 a state court granted a preliminary injunction requiring Kalshi to keep its sports contracts geofenced away from people in Michigan.
- Connecticut. A federal judge refused Kalshi a preliminary injunction against the state, and Kalshi has appealed to the Second Circuit; its emergency request for protection in the meantime was refused. On 27 August 2026 the state sued Kalshi.
- New York. In July 2026 a federal judge refused to stop New York enforcing its gambling laws against Kalshi, and Kalshi has appealed to the Second Circuit. On 31 July 2026 New York sued Kalshi; the CFTC is suing New York separately.
- Minnesota. Minnesota's ban, signed into law on 18 May 2026, would have made it a felony from 1 August 2026 to operate or advertise prediction markets in the state. It never took effect: on 27 July 2026 a federal judge granted Kalshi, Polymarket US and the CFTC a preliminary injunction, finding the Commodity Exchange Act likely preempts it. The CFTC sued Minnesota within days of the signing, and Kalshi filed its own federal suit on 28 May 2026.
- CFTC counter-suits (Arizona, Connecticut, Illinois, and more). On 2 April 2026 the CFTC went on the offensive, filing federal declaratory-and-injunctive-relief actions against Arizona, Connecticut, and Illinois, asking the courts to rule that state gambling laws are invalid as applied to CFTC-registered contract markets. It has since added suits against New York and Wisconsin (the Wisconsin complaint filed in late April 2026) and against Minnesota. A federal court blocked Arizona's criminal prosecution, first by temporary restraining order and then by preliminary injunction in May 2026, holding that federal law preempts state gambling law as applied to CFTC-regulated derivatives. Arizona's case was then paused until the Ninth Circuit decided the Nevada cases. After that court ruled against Kalshi on 28 August 2026, Arizona asked the Ninth Circuit in September 2026 to vacate the injunction, arguing that the two cases raise the same questions. The injunction remains in force while that request is decided. CFTC Chairman Michael Selig framed the campaign as defending the agency's "exclusive regulatory authority" against "overzealous state regulators."
The pattern: the Third Circuit's April 2026 ruling was the first federal appeals decision and went Kalshi's way. The Ninth Circuit has since ruled the other way: on 28 August 2026 it held that Kalshi was unlikely to show federal law preempts Nevada's gaming rules, because its sports contracts are sports bets rather than swaps, and on 25 September 2026 the Sixth Circuit reached the same view for Ohio and Tennessee. The Tenth and Second Circuits have refused Kalshi emergency protection while its appeals there run. The federal appeals courts are now split. Kalshi has asked the full Ninth Circuit and, on 9 October, the full Sixth Circuit to rehear its cases, and New Jersey has asked the Supreme Court to review the Third Circuit decision.
Venue availability by state
The table lists the states where a court ruling, state lawsuit or CFTC suit is on record as of 2 October 2026. A state not listed has no action we have verified; that is not a guarantee. Kalshi publishes its own state availability, which is the authoritative source.
| State | Kalshi status, as of 2 October 2026 |
|---|---|
| New Jersey | Operates (protected by the injunction Kalshi won; New Jersey has asked the Supreme Court to review) |
| Tennessee | No longer protected: the Sixth Circuit vacated Kalshi's injunction on 25 September 2026 |
| Nevada | Sports, election and entertainment contracts blocked (injunction, then geofenced from 12 Aug 2026) |
| Ohio | Restricted (lost its motion, affirmed by the Sixth Circuit on 25 September 2026) |
| Utah | Not protected: injunction refused, and the Tenth Circuit refused emergency relief in September 2026 |
| Washington | Sports, election, political, entertainment, culture and technology contracts barred by a state court order of August 2026 |
| Michigan | Sports contracts geofenced under a state court injunction of September 2026 |
| Arizona | Contested (criminal charges; CFTC won an order blocking prosecution, which Arizona asked the Ninth Circuit in September 2026 to vacate) |
| Massachusetts | Contested (injunction on hold; Supreme Judicial Court heard the appeal on 4 May 2026) |
| Connecticut | Contested in both directions: injunction refused and on appeal, the CFTC is suing the state, and the state sued Kalshi on 27 August 2026 |
| Illinois, Wisconsin | Contested (CFTC suing the state) |
| New York | Contested in both directions: injunction refused and on appeal, the CFTC is suing the state, and New York sued Kalshi on 31 July 2026 |
| Minnesota | Operates: a federal judge enjoined the state ban on 27 July 2026, days before it was due to take effect |
Polymarket US publishes no per-state availability map, so no reliable state-by-state picture exists for it; it is covered by the Minnesota injunction alongside Kalshi. Robinhood's event contracts face the same state questions, and Robinhood is a co-defendant with Kalshi in the Ho-Chunk Nation suit. For individual states, see our guides to Polymarket in California, New York and Texas.
The tribal gaming front
State regulators are not the only ones challenging prediction markets. A growing set of tribal nations argues that sports event contracts amount to unlicensed sports betting on tribal lands, and that letting them run nationwide would undermine the gaming exclusivity tribes negotiated under the Indian Gaming Regulatory Act (IGRA) and their state compacts.
The argument runs parallel to the states' case but rests on different ground. Under IGRA, tribes hold authority over Class III gaming on their lands, secured through federally approved compacts. The tribes contend that if the "these are swaps, not gambling" position prevails, any company could offer sports wagering on tribal lands without ever negotiating a compact. They point to practical mismatches too: Kalshi admits users from 18, while tribal gaming rules set the gambling age at 21.
Three developments stand out. The first was added on 21 October 2026; the other two are as of 2 October 2026:
- California tribes (Ninth Circuit). On 16 September 2026, in Blue Lake Rancheria v. Kalshi (No. 25-7504), the Ninth Circuit held that Blue Lake Rancheria and Chicken Ranch Rancheria of Me-Wuk Indians are likely to succeed on their IGRA claim: Kalshi's sports event contracts, entered into from their tribal lands, are class III gaming the tribes have not authorised, and the Commodity Exchange Act's exclusive jurisdiction does not reach them. It is the first federal appeals ruling on the tribal question. The court did not order Kalshi to stop; it sent the case back to the Northern District of California to decide on an injunction. Kalshi told that court on 14 October that it has geofenced the tribes' lands for sports contracts since about 23 September, which the tribes dispute. On 21 October the district court told the parties to discuss an agreed geofencing arrangement and allowed a third tribe, Buena Vista Rancheria, to join the case. California's Attorney General supported the tribes as amicus.
- Ho-Chunk Nation (Wisconsin). The Ho-Chunk Nation sued Kalshi and its partner Robinhood, arguing they run unlicensed sports betting through binary event contracts. In May 2026 a federal judge in the Western District of Wisconsin allowed the IGRA claims to proceed and found the tribe had shown a likelihood of success on the merits, a notable setback for the platforms.
- New Mexico tribes. In May 2026, four New Mexico tribes (the Mescalero Apache Tribe and the Pueblos of Isleta, Pojoaque, and Sandia) filed a federal suit alleging Kalshi's sports event contracts violate IGRA and their compacts, and asking the court to stop Kalshi offering sports contracts on their lands.
The federal preemption question
At the heart of every state dispute is one legal question: does the Commodity Exchange Act's grant of exclusive jurisdiction to the CFTC over transactions on designated contract markets stop states regulating those transactions as gambling?
Kalshi's argument is that Congress made CFTC jurisdiction exclusive, in terms. A designated contract market is a federally regulated venue, and if states could use their gambling laws to override that, any state could decide on its own which federally approved products its residents could reach.
The state regulators' argument is that preemption is narrower than that, and that states keep their traditional police power to regulate gambling. They point to the Supreme Court's 2018 ruling in Murphy v. NCAA, which left sports betting regulation to the states, and argue that Congress never meant the Commodity Exchange Act to bypass state gambling law, an argument the 2024 Loper Bright decision, which ended judicial deference to agency interpretations, makes easier to press.
Both arguments have serious force, which is why the courts have split. As of 2 October 2026 the Supreme Court has not taken the question, but New Jersey has asked it to, and Kalshi has asked the full Ninth Circuit to rehear its case.
The legislative angle
Congress is also engaged. On 23 March 2026, Senators John Curtis (R-Utah) and Adam Schiff (D-California) introduced the Prediction Markets Are Gambling Act. The bill would amend federal law so that sports and casino-style event contracts may not be offered on CFTC-regulated platforms. It is bipartisan, and it would still need to clear the usual committee and floor stages.
If it passed, the preemption question would fall away for sports and casino-style contracts, because the CFTC would no longer have jurisdiction over them. Kalshi and Polymarket US would lose the ability to offer those categories nationally, while non-sports contracts (economics, politics, entertainment, weather) would remain.
What this means for you
If you live in a state with no action against Kalshi on record, Kalshi is available to people in your state as of 2 October 2026. If you live in a state with an active ruling or lawsuit, your access to sports contracts in particular may be restricted, and in Washington the restriction also covers election, political, entertainment, culture and technology contracts.
If you plan to hold significant positions, the legal uncertainty is a real risk factor. A ruling against federal preemption could force platforms to license state by state or withdraw categories, which could reduce market depth or affect positions held by users in the states concerned.
If Kalshi restricts the contract you want in your state, Polymarket US does not get round the problem: it operates under the same federal and state framework, and the offshore Polymarket is closed to US residents. That is a state-level, contract-specific restriction rather than a bar on the venues themselves: Kalshi has held a CFTC designation since 2020 and remains a legal option for US residents generally, as does Polymarket US.
For context on how the UK handles the same products through a different regulatory lens, see our guide to whether prediction markets are legal in the UK. For a comparison of the two main US platforms, see Polymarket vs Kalshi.
How iPredicta fits in
iPredicta tracks prediction-market availability by jurisdiction. When a state changes its position on Kalshi, when a federal court rules on preemption, when the CFTC issues new guidance, or when Polymarket US widens its rollout, those are the changes that affect which platforms you can use, and we keep this guide current so you do not have to follow a dozen court dockets yourself.
Correction, 5 August 2026. An earlier version of this guide stated that "Kalshi and Polymarket offshore are not legal options for US residents." That was wrong about Kalshi, which has held a CFTC designation since 2020 and is a legal option for US residents generally. The restriction the sentence was describing is state-level and contract-specific, and the wording has been corrected to say so. The statement about the offshore Polymarket platform was accurate and is unchanged.
Correction, 10 August 2026. An earlier version of this guide said Minnesota's prediction-market ban was "blocked from 1 Aug 2026 unless courts intervene". The courts did intervene: on 27 July 2026 a federal judge granted a preliminary injunction barring enforcement against CFTC-designated exchanges, so Kalshi and Polymarket US continue to operate in Minnesota while the case proceeds. The state bullet, the status table, the FAQ and the meta description have been corrected. The same update widens the Nevada entry, which described only sports contracts as blocked: from 12 August 2026 Kalshi geofences the state under a 24 July agreement with the Gaming Control Board, covering election and entertainment contracts too.
Correction, 15 August 2026. The Nevada wording added in the 10 August update above was wrong in two ways, and this guide repeated it in four places. It said Kalshi geofences Nevada "from 12 August 2026", and that the geofencing agreement extended the block to election and entertainment contracts. Neither is right. Nevada users were already barred from all three categories by a state court order well before August: a temporary restraining order on 20 March 2026, made a preliminary injunction on 28 April, which the Nevada Supreme Court declined to pause while Kalshi appeals. A further order on 18 May required Kalshi to enforce that bar by geofencing. What happened in August concerned enforcement rather than scope: after Board investigators bought prohibited contracts from inside Nevada on eight occasions, Kalshi agreed in July to replace its own IP-based geofence with a multi-source system supplied by GeoComply and to have it fully operational by 12 August. So that date was a compliance deadline for the mechanism, not the start of the prohibition and not a widening of it. The state bullet, the status table, the guidance paragraph and the summary sentence have been corrected, and the same wording has been corrected on our guide to opening a Kalshi account.
Correction, 2 October 2026. An earlier version of this guide described the Ninth Circuit's ruling in Kalshi's Nevada case as pending and expected. The court ruled on 28 August 2026, against Kalshi, and Kalshi has asked the full court to rehear the case. The same update records the Sixth Circuit's ruling of 25 September 2026 against Kalshi in Ohio and Tennessee, which vacated the Tennessee injunction this guide had listed as protecting Kalshi there, and New Jersey's petition to the Supreme Court of 2 September 2026. The Nevada entry, the status table, the summary of the case law, the section on where the law is heading and the FAQ have been corrected.
Further correction, 2 October 2026. The Arizona entry said the state's charges remained live "pending the Ninth Circuit". That ruling came on 28 August 2026, and in September Arizona asked the Ninth Circuit to vacate the injunction that blocks its prosecution; the injunction remains in force while it decides. Separately, the earlier correction today updated Tennessee in the status table but not in the Tennessee entry or the FAQ, which still said Kalshi was protected by its Tennessee injunction. The Sixth Circuit vacated that injunction on 25 September 2026, and all three now say so.
Correction, 3 October 2026. This guide did not list Utah, Washington or Michigan, where courts have ruled against Kalshi. In Utah a federal judge refused Kalshi an injunction in August 2026 and the Tenth Circuit refused emergency relief in September. In Washington a state court order of August 2026 bars sports, election, political, entertainment, culture and technology contracts, so the restriction there goes well beyond sports. In Michigan a state court injunction of early September 2026 keeps sports contracts geofenced. The state list, the status table and the FAQ now include all three.
Correction, 5 October 2026 (merge). This guide now also covers Polymarket's route back into the US, which had its own pages. In combining them, several claims were corrected or removed. Massachusetts' appeal was described as heading for the Supreme Judicial Court; that court heard it on 4 May 2026. The guide gave Robinhood "$200 million in revenue in its first full year", which we could not verify and have removed, along with an unverified state fine in Ohio, two differing counts of states where Kalshi operates, and forecasts of when or how the courts and Congress will decide.
Correction, 7 October 2026. The Nevada entry said the Ninth Circuit's ruling of 28 August 2026 upheld the dissolution of the federal injunction Kalshi had won, without qualification. The court upheld it only for Kalshi's sports-related contracts, and sent Nevada's challenge to its election contracts back to the district court. The Nevada entry now says so. This does not change what Kalshi can offer in Nevada, where a state court injunction bars sports, election and entertainment contracts.
Correction, 21 October 2026. The tribal gaming section listed two developments as of 2 October 2026 and left out the most significant one, which came earlier: the Ninth Circuit's ruling of 16 September 2026 in Blue Lake Rancheria v. Kalshi, the first federal appeals decision on whether sports event contracts can be offered on tribal land without the tribe's authorisation. It has been added from the court's opinion and the district court record.
Frequently asked questions
Are prediction markets legal in the US?
Yes at the federal level. CFTC-designated platforms including Kalshi and Polymarket US operate legally under the Commodity Exchange Act, and Robinhood and Crypto.com also offer event contracts. The complication is state law. As of 2 October 2026, states including Nevada, Massachusetts, Ohio, Utah, Washington, Michigan, Connecticut, New York and Arizona have courts or regulators acting against Kalshi, the CFTC is suing several states, tribal nations have opened a separate challenge, and the federal appeals courts have split. Minnesota's outright ban was put on hold by a federal judge before it took effect.
Is Kalshi legal in my state?
As of 2 October 2026, Kalshi is restricted by court orders in Nevada (sports, election and entertainment contracts), Washington (sports, elections, politics, entertainment, culture and technology) and Michigan (sports contracts geofenced). It has no court protection in Ohio, Tennessee or Utah after losing in the Sixth and Tenth Circuits, its Massachusetts injunction is on hold pending the state Supreme Judicial Court, and it faces suits or enforcement in Arizona, Connecticut, New York, Illinois and Wisconsin. New Jersey is protected by the injunction Kalshi won there, which the state has asked the Supreme Court to review. Minnesota's ban was enjoined before it took effect. Elsewhere Kalshi operates. Always check Kalshi's own state availability before signing up, because the picture changes as cases progress.
Is Polymarket legal in the US?
Yes, through Polymarket US. Polymarket bought QCEX, a CFTC-licensed exchange, for $112 million in July 2025, and the CFTC issued an Amended Order of Designation on 25 November 2025. The US product reopened in December 2025 behind an invite-only waitlist, and in May 2026 Polymarket removed the waitlist and opened general signup on its iOS app, with full identity checks. The offshore Polymarket is a separate product: it blocks US users, and using a VPN to reach it breaches its terms.
What is the federal preemption argument for prediction markets?
Kalshi argues the Commodity Exchange Act gives the CFTC exclusive jurisdiction over transactions on designated contract markets, which preempts state gambling laws. State regulators counter that preemption is narrower, states retain police-power authority to regulate gambling regardless of federal designation. The Third Circuit sided with Kalshi in April 2026. On 28 August 2026 the Ninth Circuit went the other way in Kalshi's Nevada case, holding that Kalshi had not shown federal law likely preempts Nevada's gaming rules because its sports contracts are sports bets rather than swaps, and on 25 September 2026 the Sixth Circuit reached the same view for Ohio and Tennessee, holding in the alternative that federal law does not preempt those states' gambling laws even if the contracts were swaps. The Ninth Circuit sent Nevada's challenge to Kalshi's election contracts back to the district court. Kalshi has asked the full Ninth Circuit to rehear its case, and on 9 October asked the full Sixth Circuit to rehear its. New Jersey asked the Supreme Court on 2 September 2026 to review the Third Circuit decision, and the Court has not yet said whether it will take it.
Are prediction market winnings taxed in the US?
Yes, winnings are taxable income in the US. How they are treated depends on the product and on how the platform reports them, and the treatment of event contracts is not fully settled. Our prediction markets tax guide covers it in more depth; for your own situation, consult a tax adviser familiar with derivatives or event-contract income.