A prediction market lets you buy a yes or no contract on an event, such as a game or an election. Each contract pays $1 if you're right and nothing if you're wrong, so its price works like the crowd's estimate of the odds. Kalshi and Polymarket US are the best-known US exchanges. Federal regulators treat them as derivatives markets, but states are fighting that in court, and federal appeals courts have split on sports contracts. Whether you can use one depends on where you are and what the contract is about.
How a trade works
Say a contract on a team winning costs 40 cents. You buy 10 for $4. If the team wins, they pay $10 and you make $6 before fees. If it loses, you lose the $4 plus the fee. The 40 cents implies a 40% chance. You trade against other account holders, not a bookmaker, and many are professional market makers. You can sell before the event ends, but you may pay the fee again.
- You pay
- $4
- 10 contracts at 40 cents
- You get back
- $10 or $0
- $1 a contract if you're right
- Fee on Kalshi
- about 17 cents
- at its general rate
- Break-even
- about 41.7%
- how often the team must win
What it costs
The exchange takes a fee instead of building a margin into the odds. Kalshi's general formula is 0.07 × contracts × price × (1 − price). That's what you pay when your order fills at once. Orders that rest on the book pay less or nothing. On the trade above that's about 17 cents: you win about $5.83 or lose about $4.17, and the team must win about 41.7% of the time for you to break even.
At 50 cents the fee is 1.75 cents a contract, or about 3.4% of what you pay. A standard sportsbook bet at −110 carries a margin of about 4.5%. So a contract at 50 cents can cost less than the sportsbook's price, but only in a tight market: paying 51 cents for a true 50-50 contract costs 5.2%. The fee also weighs more on long shots, as the table shows.
What a trade costs
| Price | Kalshi (7%) | Polymarket US, entry tier (9.5%) |
|---|---|---|
| 10 cents | 5.9% | 7.9% |
| 25 cents | 5.0% | 6.7% |
| 50 cents | 3.4% | 4.5% |
| 75 cents | 1.7% | 2.3% |
| 90 cents | 0.7% | 0.9% |
A −110 sportsbook bet costs 4.55%, and −110 only prices near-even bets. At 50 cents, Polymarket US's entry fee costs about the same as −110, while Kalshi's costs about a quarter less. The spread comes on top.
What is Kalshi?
Kalshi, founded in 2018, is a US exchange regulated by the Commodity Futures Trading Commission (CFTC) as a designated contract market, the same category as the big futures exchanges, a status it has held since 2020. It lists contracts on sports, politics, the economy and more, and charges the fee above. Kalshi says it has no house. One market maker on its exchange, Kalshi Trading, is owned by its parent. Kalshi says that unit gets no special treatment, and class actions dispute the “no house” claim.
What is Polymarket?
Polymarket began as a crypto-based market outside US regulation. In January 2022 the CFTC ordered it to pay $1.4 million for offering off-exchange event contracts and to close the non-compliant markets. It came back through QCX LLC, a CFTC-designated exchange it bought, which now trades as Polymarket US. On November 24, 2025 the CFTC amended QCX's designation so brokers can offer it to their customers. The global site and Polymarket US are separate platforms.
Kalshi vs Polymarket
| Kalshi | Polymarket US | Polymarket global | |
|---|---|---|---|
| Regulator | CFTC | CFTC (QCX LLC) | Not US-regulated |
| Who can use it | US residents; court orders limit it in Nevada, Michigan and Washington | US residents, through its app or brokers, subject to state action; a court order limits Polymarket in Nevada | Outside the US, subject to local law; its rules let users in the US, UK, Australia and Ontario close positions but not open new ones |
| Money | Dollars | Dollars | pUSD, a crypto token backed by USDC |
| Fees | Takers pay 7% × price × (1 − price); varies by market | Takers pay 9.5% × price × (1 − price) under $10,000 of volume over the last 30 days, falling to 6.95% at $250,000; 6.95% in an account's first 7 days | Takers only, 4-7% × price × (1 − price) by category (sports 5%); geopolitics free; makers free |
| In court | Nevada, Ohio, Tennessee, Utah, Arkansas, New Jersey, Massachusetts, Michigan, Washington, New York, Connecticut, Maryland, Arizona and California tribes, among others | In court with Ohio, Massachusetts, Michigan, New Mexico, Minnesota, New York and Baltimore, among others | Its parent, Blockratize, is sued by Nevada and Kentucky and in class actions |
What about the sportsbooks?
Sportsbooks have moved in. DraftKings said more than 1.6 million customers had tried DraftKings Predictions in 2026, and on November 5 it cut its 2026 adjusted EBITDA outlook to $175-275 million from $700-900 million, with $650-700 million going into Predictions. Brokers and exchanges including Robinhood, Coinbase, Crypto.com and Gemini offer event contracts too.
Is Kalshi legal?
Federally, Kalshi is a registered exchange. Whether states can still ban its sports contracts as gambling is the open question, and the courts disagree. The Third Circuit sided with Kalshi against New Jersey in April 2026. The Ninth Circuit (Nevada, August 2026) and the Sixth Circuit (Ohio and Tennessee, September 2026) went the other way. New Jersey has asked the Supreme Court to step in, and so have Robinhood and Crypto.com in the Nevada case. These are early rulings on injunctions, not final judgments. Kalshi's reply to New Jersey is due December 7.
Until the Supreme Court acts, the answer depends on your state: court orders limit Kalshi in Nevada, Michigan and Washington, a Massachusetts order is on hold until its high court rules, and the Second Circuit refused on November 3 to stop New York and Connecticut from enforcing their laws. Federal judges have gone the other way in Arizona, Minnesota and Illinois, where orders block enforcement against these exchanges for now.
Utah has filed criminal charges against Kalshi and its founders, the Deseret News reported. Charges aren't a conviction. Arkansas sued it on November 4, the day it also sued sweepstakes operator VGW. Kalshi argues that federal law overrides state gambling laws.
Is Polymarket legal in the US?
Polymarket US is a CFTC-registered exchange, so it can operate federally, and the state fights reach it too. A Nevada court order bars Polymarket's sports, election and entertainment contracts there. Ohio's regulator ordered 10 prediction market companies and brokers to drop sports contracts on October 2, 2026; Polymarket US sued in federal court on October 16. The global site isn't US-regulated, and Polymarket's own rules let US users close old positions but not open new ones.
Where it stands: the key rulings and state actions
This is a selection of the main rulings and state actions, not a full list, newest first. Last updated November 9, 2026.
| Date | Where | What happened | Source |
|---|---|---|---|
| Nov 6, 2026 (reported) | Ohio | Coinbase agreed to stop by Nov 13 | CDC Gaming |
| Nov 5, 2026 | CFTC | Said exchanges must end domestic geographic restrictions that breach its impartial-access rules within 30 days, or explain why they can't | CFTC |
| Nov 4, 2026 | Arkansas | The Attorney General sued Kalshi, alleging illegal gambling | Arkansas AG |
| Nov 4, 2026 | Ninth Circuit | Denied Kalshi a rehearing in the Nevada case | order |
| Nov 4, 2026 | California | A federal judge barred Kalshi's sports contracts on the lands of two tribes | order |
| Nov 3, 2026 | Second Circuit | Refused Kalshi (New York, Connecticut) and Coinbase (Connecticut) injunctions pending appeal, so both states can enforce | CDC Gaming |
| Oct 30, 2026 | Illinois | A federal judge barred Illinois from enforcing its gambling laws against swaps, including sports contracts, on CFTC-regulated exchanges and brokers; Illinois has appealed | order |
| Oct 28, 2026 | Utah | Criminal charges against Kalshi and its co-founders, as reported | Deseret News |
| Oct 26, 2026 | Utah | The US and the CFTC sued Utah, claiming exclusive federal authority | complaint |
| Oct 26, 2026 | Ohio | Robinhood agreed to stop new sports contracts there by Nov 2 | Robinhood 10-Q |
| Oct 20, 2026 | Utah | The Attorney General filed a civil action against Kalshi | Deseret News |
| Oct 16, 2026 | Ohio | Polymarket US sued over Ohio's enforcement | complaint |
| Oct 9, 2026 | CFTC | Interim rule: casino-style products, including sportsbook wagers, aren't swaps; comments close Nov 18. Proposal: event contracts on sports, politics, culture and weather would be | rule, proposal |
| Oct 2, 2026 | Ohio | The regulator ordered 10 companies to drop sports contracts | letters |
| Sep 25, 2026 | Sixth Circuit | Refused to block Ohio's laws against Kalshi and threw out the injunction Kalshi had won in Tennessee; Kalshi has asked the full court to rehear it | ruling |
| Sep 24, 2026 | New York | The Attorney General sued Polymarket US | petition |
| Sep 16, 2026 | Ninth Circuit | Sided in part with California tribes on sports contracts on their lands | opinion |
| Sep 2, 2026 | Supreme Court | New Jersey asked it to review the Third Circuit ruling; Kalshi's response is due Dec 7 | docket 26-299 |
| Sep 1, 2026 | Michigan | State injunction against Kalshi's sports contracts, after a Jun 29 restraining order | order, DeFi Rate |
| Aug 28, 2026 | Ninth Circuit | Federal law likely doesn't override Nevada's gaming rules for sports contracts | opinion |
| Aug 2026 | Washington | A King County judge ordered Kalshi to stop sports, election, politics, entertainment, culture, tech and science, and “mentions” contracts in the state, under an injunction granted in July | Attorney General |
| Aug 2026 | Utah | A federal judge ruled that Utah's laws apply to Kalshi's sports contracts | Deseret News |
| Jul 27, 2026 | Minnesota | A federal judge blocked the state's prediction market ban days before it took effect, in cases brought by Kalshi, Polymarket US and the CFTC | Courthouse News |
| May 2026 | Nevada | A state judge barred Polymarket's sports, election and entertainment contracts there, after the regulator's January suit and a temporary order | KSNV |
| May 2026 | Maryland, Massachusetts | The Fourth Circuit and Massachusetts' high court heard cases; no ruling yet in either, as far as we could find | Covers, Insurance Journal |
| May 5, 2026 | Arizona | At the CFTC's request, a federal judge barred Arizona from enforcing its gambling laws over event contracts on CFTC-regulated exchanges, which stops its criminal case against Kalshi for now; Arizona has appealed | order |
| Apr 28, 2026 | Nevada | A state judge ordered Kalshi to stop election, sports and entertainment contracts for people in Nevada | DeFi Rate |
| Apr 6, 2026 | Third Circuit | Sided with Kalshi against New Jersey | opinion, docket 26-299 |
| Feb 9, 2026 | Massachusetts | Polymarket US sued the state | DeFi Rate |
| Feb 4, 2026 | CFTC | Withdrew its 2024 event-contracts proposal | CFTC |
Outside the US
- Australia. On October 30, 2026 ASIC said prediction market contracts have “all the features of a bet”, that it isn't convinced retail markets are in the public interest, and that Australians using offshore platforms have no protection under Australian law. It compared them with binary options, banned for retail clients since 2021: in the 13 months before that ban, 74-77% of active retail clients lost money.
- Great Britain. The Gambling Commission said on February 4, 2026 that prediction markets couldn't class themselves as non-gambling products in Britain and would appear to be betting intermediaries, which need a license, and that unlicensed operators shouldn't serve British customers. Operating without a license is a criminal offense.
Is it gambling?
Legally, that's what the courts are deciding. In practice it works the same way for your money: you can lose all of your stake, and no system beats a fair market after fees. Set a budget the way you would at a casino. Help is at 1-800-MY-RESET in the US.
In the news
- Robinhood, Coinbase Agree to Halt Sports Contracts in Ohio (November 8, 2026)
- Kalshi Loses Nevada Rehearing Bid as California Tribes Win Injunction (November 7, 2026)
- DraftKings Cuts 2026 Profit Outlook to Fund Prediction Markets Push (November 7, 2026)
- Arkansas Sues Kalshi and VGW as State Gambling Fights Widen (November 5, 2026)
- ASIC Says Prediction Markets Have “All the Features of a Bet” (November 3, 2026)
Questions about prediction markets
What is Kalshi?
A US exchange regulated by the CFTC where you trade yes or no contracts on events.
Is Kalshi legal?
It's federally registered, but several states say its sports contracts are illegal gambling, and the courts are split.
Is Polymarket legal in the US?
Polymarket US is CFTC-registered. The global site isn't US-regulated and doesn't take new US trades.
What's the difference between Kalshi and Polymarket?
Both run CFTC-regulated exchanges in the US. Kalshi is one exchange you can join directly, in dollars. Polymarket has two platforms: Polymarket US, in dollars through its app or brokers, and a crypto-based global site that doesn't take new US trades.
Are prediction markets gambling?
Courts are deciding. ASIC and Britain's Gambling Commission treat them much like betting.
How we checked. By the casin.com team. Last checked November 9, 2026. Sources: court opinions and filings, CFTC and state releases, press reports where noted, ASIC and the Gambling Commission, the platforms' own pages, company filings and casin.com news. This is a guide, not legal or financial advice.