Prediction markets are legal in the United States, but the regulatory landscape is evolving fast. Here's what you need to know as a trader in 2026.
Yes, prediction markets are legal in the US — but how they're regulated depends on the platform. Kalshi is fully regulated by the CFTC (Commodity Futures Trading Commission). Polymarket operates offshore but allows US users with some restrictions.
| Platform | Legal Status (US) | Regulator |
|---|---|---|
| Kalshi | Fully legal, CFTC-regulated | CFTC (DCM license) |
| Polymarket | Offshore; US access limited | Not US-regulated |
| Robinhood | Legal (event contracts) | CFTC through Kalshi |
| Coinbase | Legal (event contracts) | State-dependent |
Prediction markets exploded in popularity after the 2024 US election, and regulators have been catching up:
Wisconsin lawsuit (April 2026) — Wisconsin sued Kalshi, Coinbase, Polymarket, Robinhood, and Crypto.com, arguing their prediction markets function as unlicensed gambling rather than financial instruments. This is the first major state-level legal challenge.
CFTC under pressure — The CFTC, which regulates prediction markets, has shrunk to its smallest size in 15 years. The agency's workforce has dropped 24%, raising questions about enforcement capacity.
Insider trading crackdown — Researchers found $143 million in profits from insider trading on Polymarket between February 2024 and February 2026, flagging over 200,000 suspicious bets. Congress introduced the Prediction Markets Security and Integrity Act (S. 4060) to prohibit trading on material nonpublic information.
What this means for traders: The platforms themselves remain legal, but expect tighter rules around insider trading and potentially new state-level restrictions. If you're using Kalshi, you're on the safest legal ground. If you're using Polymarket, stay informed about evolving regulations.
Use regulated platforms — Kalshi is the safest option for US traders. It's CFTC-regulated, accepts USD deposits, and has clear legal standing.
Track what smart money is doing — Large traders often have better information. Tools like PredTerminal track $10K+ whale bets across both Polymarket and Kalshi in real-time, helping you see where conviction is highest.
Compare prices across platforms — The same event can be priced differently on Polymarket vs Kalshi. These price gaps represent real opportunities. See our live comparison.
Stay diversified — Don't put all your capital in one market or one platform. Prediction markets can be volatile, and resolution disputes do happen.
PredTerminal is not a trading platform — it's an intelligence tool. We aggregate data from both Polymarket and Kalshi to show you:
All free, no account required.