Are prediction markets gambling, and where are they legal?
Under federal law, prediction markets are not gambling. The CFTC regulates them as commodity derivatives. But many states say sports event contracts are sports betting, and federal appeals courts have split on who is right. As of October 2026, CFTC-regulated platforms like Kalshi and Polymarket US are legal federally and available in most states, with court orders and state actions carving out exceptions, mostly for sports.
Are prediction markets gambling? The legal answer
The question matters because gambling is regulated state by state, while derivatives are regulated federally by the Commodity Futures Trading Commission (CFTC). The two sides:
- The CFTC says they're derivatives. On October 9, 2026 it proposed expressly defining event contracts on sports, politics, culture and weather as swaps. CFTC Chairman Selig: "These products are commodity derivatives squarely within the CFTC's regulatory remit under the Commodity Exchange Act." The same day, an interim rule excluded sportsbook and casino wagers from the swap definition: "Casino-style gambling products are not derivatives."
- Many states say sports contracts are sports betting. Connecticut's Attorney General: "Sports event contracts are no different than sports betting." Ohio and 38 other states plus DC have asked the Supreme Court to side with the states.
- The courts are split. The Third Circuit (New Jersey, April 6, 2026) held Kalshi's sports contracts "are swaps traded on a CFTC-licensed DCM, so the CFTC has exclusive jurisdiction." The Ninth Circuit (Nevada, August 28, 2026) and Sixth Circuit (Ohio and Tennessee, September 25, 2026) went the other way. The Sixth Circuit wrote that "Kalshi has not shown that its sports-event contracts satisfy the statutory definition of a 'swap'." New Jersey's Supreme Court petition (No. 26-299) is pending.
Our framework: five practical differences from a sportsbook
| Sportsbook bet | Prediction-market contract | |
|---|---|---|
| Who's on the other side | The sportsbook | Other traders (or a market maker) via an exchange |
| Regulator | State gaming regulator | CFTC (federal), with states contesting sports |
| How you pay the house | Margin (vig) built into the odds | A published fee plus the bid/ask spread |
| Exit before the result | Only if the book offers a cash-out | Sell your contract at the market price, usually any time |
| Minimum age | Often 21 (New York and Missouri, among others) | Usually 18 (Novig: 21) |
Whether those differences make it "not gambling" is exactly what the courts are deciding. In practice, treat prediction markets with the same caution as betting: only risk what you can afford to lose.
Prediction market legality by state: the map
State-by-state table: every platform
✓ = available · ✓ contested = available, but the state has taken action · No sports = sports contracts blocked · Limited = sports and some other categories blocked · ✗ = not available. Sources are listed below; details are on each platform's page.
| State | Kalshi | Polymarket US | Novig | PredictIt | Robinhood | DraftKings | FanDuel |
|---|---|---|---|---|---|---|---|
| Alabama | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Alaska | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Arizona | ✓ | ✓ | ✗ | ✓ | ✓ contested | No sports | No sports |
| Arkansas | ✓ contested | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| California | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Colorado | ✓ | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| Connecticut | ✓ contested | ✓ contested | ✓ contested | ✓ | ✓ contested | Check app | No sports |
| Delaware | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| District of Columbia | ✓ | ✓ | ✓ | ✓ | ✓ | Check app | Check app |
| Florida | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Georgia | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Hawaii | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Idaho | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Illinois | ✓ contested | ✓ contested | ✓ | ✓ | ✓ contested | No sports | No sports |
| Indiana | ✓ | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| Iowa | ✓ contested | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| Kansas | ✓ | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| Kentucky | ✓ contested | ✓ contested | ✓ | ✓ | ✓ contested | No sports | No sports |
| Louisiana | ✓ | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| Maine | ✓ | ✓ | ✓ | ✓ | ✓ | ✗ | No sports |
| Maryland | ✓ contested | ✓ | ✓ | ✓ | No sports | Check app | No sports |
| Massachusetts | ✓ contested | ✓ contested | ✓ contested | ✓ | ✓ contested | Check app | No sports |
| Michigan | No sports | ✓ contested | ✗ | ✓ | No sports | No sports | No sports |
| Minnesota | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Mississippi | ✓ | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| Missouri | ✓ contested | ✓ contested | ✓ contested | ✓ | ✓ contested | No sports | No sports |
| Montana | ✓ contested | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| Nebraska | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Nevada | Limited | ✗ | ✗ | ✓ | No sports | No sports | No sports |
| New Hampshire | ✓ | ✓ | ✓ | ✓ | ✓ | ✗ | No sports |
| New Jersey | ✓ | ✓ | ✓ | ✓ | ✓ contested | Check app | No sports |
| New Mexico | ✓ contested | ✓ contested | ✓ contested | ✓ | ✓ | ✓ | ✓ |
| New York | ✓ contested | ✓ contested | ✓ contested | ✓ | ✓ | No sports | No sports |
| North Carolina | ✓ | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| North Dakota | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Ohio | ✓ contested | ✓ contested | ✓ contested | ✓ | ✓ contested | No sports | No sports |
| Oklahoma | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Oregon | ✓ | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| Pennsylvania | ✓ | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| Rhode Island | ✓ contested | ✓ contested | ✓ | ✓ | ✓ | Check app | ✓ |
| South Carolina | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| South Dakota | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Tennessee | ✓ contested | ✓ contested | ✓ | ✓ | ✓ | No sports | No sports |
| Texas | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Utah | ✓ contested | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Vermont | ✓ | ✓ | ✓ | ✓ | ✓ | Check app | No sports |
| Virginia | ✓ | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| Washington | Limited | ✓ | ✓ contested | ✓ | ✓ contested | No sports | No sports |
| West Virginia | ✓ | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
| Wisconsin | ✓ contested | ✓ contested | ✓ contested | ✓ | ✓ contested | No sports | No sports |
| Wyoming | ✓ | ✓ | ✓ | ✓ | ✓ | No sports | No sports |
Notes: Kalshi "Limited" in Nevada (sports, election and entertainment) and Washington (sports, politics, entertainment and more) under court orders; Michigan sports blocked by court order. Novig is 21+ and excludes Arizona, Michigan and Nevada. Robinhood blocks sports in Maryland and Nevada and new sports positions in Michigan (one Robinhood article says Maryland has no event contracts at all). DraftKings and FanDuel offer sports only in states without their sportsbooks; "Check app" marks states their published sources don't make clear.
Polymarket legal states
Polymarket US, the CFTC-regulated app, says on the App Store it is "fully legal & CFTC regulated in the United States — in all 50 states*", with the footnote "Trading currently unavailable in NV." A Nevada state court enjoined it on May 29, 2026. Its documentation doesn't publish any other excluded states, but these states have acted against it:
| State | Action against Polymarket US | Status (October 18, 2026) |
|---|---|---|
| Nevada | Gaming Control Board lawsuit (January 2026); injunction May 29, 2026 | Unavailable |
| New York | AG and Governor lawsuit (September 24, 2026); Polymarket countersued in federal court | Contested |
| Michigan | Polymarket sued state officials (March 2026); injunction denied June 17, 2026; Sixth Circuit appeal | Contested |
| Kentucky | AG lawsuit (June 17, 2026) | Contested |
| Massachusetts | Polymarket sued the AG (February 2026); case stayed | Contested |
| Illinois | Gaming Board cease-and-desist (January 27, 2026) | Contested |
| Tennessee | Sports Wagering Council cease-and-desist (January 9, 2026; reported) | Contested |
| Connecticut | Cease-and-desist to nine platforms (September 10, 2026; reported) | Contested |
| Missouri | AG cease-and-desist (September 2026; reported) | Contested |
| Ohio | Casino Control Commission cease-and-desist (October 2, 2026; reported) | Contested |
| Wisconsin | Attorney General lawsuit over sports contracts (April 23, 2026) | Contested |
| New Mexico | Polymarket sued state officials (June 2026); stayed, with the state agreeing not to enforce meanwhile | Contested (standstill) |
| Rhode Island | AG lawsuit against Kalshi and Polymarket US (May 2026); consolidated in federal court, ruling pending | Contested |
The international polymarket.com site is a different product and is not open to US residents. For how to sign up and trade, see how to use the Polymarket app.
Check a platform
Every state ruling and source, platform by platform: Is Kalshi legal? · Is Polymarket legal? · Is Novig legal?
Check your state
Our state guides go deeper on the rules where you live. Always confirm in the app, which checks your location, before funding an account.
- Are prediction markets legal in Alabama?
- Are prediction markets legal in Alaska?
- Are prediction markets legal in Arizona?
- Are prediction markets legal in Arkansas?
- Are prediction markets legal in California?
- Are prediction markets legal in Colorado?
- Are prediction markets legal in Connecticut?
- Are prediction markets legal in Delaware?
- Are prediction markets legal in District of Columbia?
- Are prediction markets legal in Florida?
- Are prediction markets legal in Georgia?
- Are prediction markets legal in Hawaii?
- Are prediction markets legal in Idaho?
- Are prediction markets legal in Illinois?
- Are prediction markets legal in Indiana?
- Are prediction markets legal in Iowa?
- Are prediction markets legal in Kansas?
- Are prediction markets legal in Kentucky?
- Are prediction markets legal in Louisiana?
- Are prediction markets legal in Maine?
- Are prediction markets legal in Maryland?
- Are prediction markets legal in Massachusetts?
- Are prediction markets legal in Michigan?
- Are prediction markets legal in Minnesota?
- Are prediction markets legal in Mississippi?
- Are prediction markets legal in Missouri?
- Are prediction markets legal in Montana?
- Are prediction markets legal in Nebraska?
- Are prediction markets legal in Nevada?
- Are prediction markets legal in New Hampshire?
- Are prediction markets legal in New Jersey?
- Are prediction markets legal in New Mexico?
- Are prediction markets legal in New York?
- Are prediction markets legal in North Carolina?
- Are prediction markets legal in North Dakota?
- Are prediction markets legal in Ohio?
- Are prediction markets legal in Oklahoma?
- Are prediction markets legal in Oregon?
- Are prediction markets legal in Pennsylvania?
- Are prediction markets legal in Rhode Island?
- Are prediction markets legal in South Carolina?
- Are prediction markets legal in South Dakota?
- Are prediction markets legal in Tennessee?
- Are prediction markets legal in Texas?
- Are prediction markets legal in Utah?
- Are prediction markets legal in Vermont?
- Are prediction markets legal in Virginia?
- Are prediction markets legal in Washington?
- Are prediction markets legal in West Virginia?
- Are prediction markets legal in Wisconsin?
- Are prediction markets legal in Wyoming?
Frequently asked questions
Are prediction markets gambling?
Legally, it depends who you ask. The CFTC says event contracts are commodity derivatives under federal law, and in October 2026 proposed defining them as swaps. Many states say sports event contracts are sports betting. Federal appeals courts are split, and the Supreme Court has been asked to decide (docket 26-299).
Is Polymarket legal in my state?
Polymarket US's App Store listing says it is CFTC-regulated and available 'in all 50 states', with trading currently unavailable in Nevada. Several states, including New York, Ohio, Tennessee, Connecticut and Missouri, have taken action against it. The international polymarket.com site isn't open to US residents.
Which prediction market is legal in the most states?
PredictIt, which is politics-only, has no excluded states we could find. Among sports-capable platforms, Polymarket US excludes only Nevada and Kalshi is blocked by court order only in Nevada, Washington and Michigan, though both face challenges in other states.
Do prediction market winnings count as gambling income for taxes?
The IRS hasn't issued guidance on event contracts, so tax treatment is unsettled. See our Kalshi fees and taxes guide for what's known, and speak to a tax professional.
Sources
- CFTC — Press release 9309-26: interim final rule excluding casino-style gambling from "swap" (October 9, 2026)
- CFTC — Press release 9310-26: proposal defining event contracts as swaps (October 9, 2026)
- US Court of Appeals, Third Circuit — KalshiEX v. Flaherty (April 6, 2026)
- US Court of Appeals, Ninth Circuit — KalshiEX v. Assad (August 28, 2026)
- US Court of Appeals, Sixth Circuit — KalshiEX v. Schuler / Orgel (September 25, 2026)
- US Supreme Court — Docket 26-299 and states' amicus brief (October 7, 2026)
- Connecticut Attorney General — Connecticut sues Kalshi (2026)
- Apple App Store — Polymarket US listing ("Trading currently unavailable in NV")
- Nevada Gaming Control Board — enforcement litigation update (June 1, 2026)
- New York Attorney General — lawsuit against Polymarket US (September 24, 2026)
- Illinois Gaming Board — cease-and-desist letters (incl. Polymarket, January 27, 2026)
- US Court of Appeals, Sixth Circuit — docket 26-1552 (QCX v. Nessel, Michigan)
- Novig Help Center — Eligibility & legality
- Robinhood Support — Event contracts overview (state restrictions)
- DK Network — DraftKings Predictions available states (July 22, 2026)
- FanDuel — Predicts new customer offer terms (18 states)
- CFTC — Motion to intervene, KalshiEX v. Furcolo (Rhode Island), D.R.I. 1:26-cv-00327 (May 28, 2026)
- Wisconsin Department of Justice — sports event contract lawsuits (April 23, 2026)
- PredictIt — FAQ (eligibility)
Last checked:
Not legal or betting advice. 18+ (21+ where required). Prediction markets involve risk of loss — only trade what you can afford to lose. Gambling problem? Call or text 1-800-MY-RESET (National Problem Gambling Helpline, 24/7).