Prediction Markets in the
United States
Your US guide to prediction markets: regulated exchanges, event contracts, and how to participate legally under CFTC oversight.
Compare available platforms
| Operator | Type | Settlement | Fees | Min deposit | KYC | Volume | |
|---|---|---|---|---|---|---|---|
| Polymarket | Crypto / On-chain | USDC on Polygon | ~2% (taker) | $1 | Light (geo-restricted) | $8B+ lifetime | Details → |
| Kalshi | CFTC-regulated | USD cash | 0–7% of profit | $1 | Full KYC required | $2B+ in 2025 | Details → |
| Manifold Markets | Play-money | Mana (play-money) | None | Free | Email only | N/A (play-money) | Details → |
How prediction markets became legal in the US
For years prediction markets sat in a legal gray zone in the US. In 2022 the CFTC blocked Polymarket from taking US bets. The agency then went after Kalshi, but a key October 2024 court injunction let Kalshi keep operating during the case — a ruling widely read as a green light for the whole category. Within weeks, Interactive Brokers added ForecastEx contracts and Robinhood launched election event contracts. The CFTC dropped its Kalshi case in May 2025. Later in 2025 the Trump administration walked away from federal enforcement against Polymarket entirely, and on October 7, 2025 Intercontinental Exchange — the company that owns the New York Stock Exchange — announced an investment of up to $2 billion in Polymarket. As of March 2026 Polymarket is rolling out a new, fully sanctioned US app via a waitlist after acquiring a licensed derivatives exchange called QCEX.
Where Americans can legally trade today
The US market now spans freestanding exchanges, brokerages with embedded event contracts, and crypto-native venues. Each operator covers a different mix of categories.
Embedded access
- Robinhood — sports and economic event contracts via Kalshi and ForecastEx (sports unavailable in NJ)
- Interactive Brokers — political, economic and financial-market contracts via ForecastEx
- Webull — economic and financial-market contracts via Kalshi
- Crypto.com — politics, economics, financial and sports via its derivatives subsidiary
- NinjaTrader — financial-market contracts via Tradovate
Standalone platforms
- Kalshi — broadest topic coverage, fully CFTC-regulated
- Polymarket — largest in the world by volume, USDC-settled, US relaunch in progress
- PredictIt — Victoria University of Wellington research project, politics only, $850 cap per contract
- Iowa Electronic Markets — University of Iowa academic project, $500 account cap
- Manifold — play-money mana plus real-money sweepcash (5% cashout fee); unavailable in DE, ID, MI, WA
- Drift Bet — Solana-based, full topic range
- Verse — sports, current events, pop culture; sweepstakes-style real-money payouts
Federal green light, state-level pushback
Even with federal regulators backing off, the state picture is messier. As of February 2026, eleven state governments are pursuing cease-and-desist orders or other enforcement actions against at least one prediction market operator, and another eight states have pending civil litigation or class action lawsuits against operators. Manifold, for instance, is unavailable in Delaware, Idaho, Michigan and Washington. The legality of any specific platform in your specific state can change with little warning — always check before depositing.
How US winnings are taxed
Platforms like Kalshi and PredictIt issue annual 1099-MISC forms reporting net profits as ordinary income, meaning winnings are taxed at your ordinary income rate. Even if a more specific status is created later, event contracts are typically held for less than a year, so they would still fall under short-term capital gains — which are taxed at ordinary income rates anyway.
The upside if you lose: you can deduct up to $3,000 of net losses per year, with anything beyond that carried forward to offset future winnings. State-level treatment varies and is best assumed to be ordinary income until your state clarifies. Note also that the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, caps the deductibility of sports betting losses at 90% starting in 2026 — relevant if you're trading sports event contracts.
Three risks that have actually played out
The Khamenei market
Kalshi ran a market on whether Iran's former supreme leader would be ousted by March 2026, with over $54M wagered on YES. After his death in U.S.–Israeli strikes on February 28, Kalshi declined to pay out, citing internal rules against death-related bets, and refunded stakes instead. Litigation is pending.
No insider rules apply
In mid-February 2026, Israeli authorities accused two people of using classified information to place Polymarket bets. Days later, six newly-funded Polymarket accounts won over $1.2M on a "US strikes Iran by Feb 28" market just before the strikes began.
Gambling-like behavior
Event contracts are short-term, all-or-nothing bets — closer to sports betting than long-term investing. If betting feels compulsive, the National Council on Problem Gambling helpline is 1-800-GAMBLER.