Are sports prediction markets legal? Status of Kalshi and Polymarket in all 50 states

Sports prediction markets are federally regulated in all 50 states, but knowing the states where you can use apps like Kalshi and Polymarket is challenging for new users. That's because some states are suing, causing sports prediction markets to be suspended in those states while cases are decided and appealed. This guide covers the legal status of Kalshi and Polymarket in each state.

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States where Kalshi and Polymarket are legal at a glance

Dollars traded on prediction markets have surpassed dollars wagered at sportsbooks, according to a Pew Research Center analysis. Combined monthly global trading volume on prediction markets was about $24 billion in April 2026. Compare that to about $14 billion per month wagered at legal U.S. sportsbooks in 2025. 

With that boom has come legal challenges in some states. Here is the legal status of sports prediction markets at Kalshi and Polymarket in each state, as of July 2026. 

*May be restricted from all trading or limited to select non-sports markets during ongoing lawsuits

Which states are contesting the legal status of prediction markets?

Kalshi and the Polymarket US app are both federally regulated by the Commodity Futures Trading Commission (CFTC) and are technically legal now in all 50 states and Washington D.C. However, a handful of states have taken action to ban prediction markets entirely and certain market categories have been banned or contested in certain states, with sports prediction markets often specifically targeted because of their similarity to sports betting markets that are state-regulated.

We'll specifically break down which states have either banned or are contesting the legal status of prediction markets like Kalshi and Polymarket in some capacity. These are brief overviews as of June 2026, so please consult your local laws before participating in trading and be aware that this is an evolving landscape.

Arizona

The state of Arizona is currently pursuing criminal charges against Kalshi, alleging that the company has violated state and election betting laws. Meanwhile, the CFTC has countersued the state and alleged that state enforcement interfered with its own ability to regulate prediction markets. The CFTC was granted a TRO (temporary restraining order) and a federal judge permanently blocked Arizona from pursuing criminal charges, though not all appeals have yet been exhausted.

California

Three tribes in California allege that prediction markets directly violate the Indian Gaming Regulatory Act and sports prediction markets also are in conflict with the state's sports betting ban. A federal judge denied the injunction sought by the California tribes, but they've appealed to the Ninth Circuit. California also began enforcing a Digital Financial Assets Law (DFAL) on July 1 that governs how crypto businesses operate, which could have a prediction market impact.

Connecticut

Connecticut issued cease-and-desist letters to several online platforms on the basis that sports contracts and election contracts constituted illegal online gambling. The CFTC then countersued (along with Arizona and Illinois) to claim exclusive federal jurisdiction and was granted an injunction from the Ninth Circuit. The case is likely to be appealed to the Supreme Court.

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Illinois

Illinois alleges that prediction markets are akin to gambling and that oversight of gambling products falls under state law. Illinois was also named in the CFTC lawsuit with Arizona and Connecticut, where the Ninth Circuit awarded an injunction preventing further action for the time being. The case is expected to be appealed to the Supreme Court.

Maryland

Maryland argues that sports event contracts are financial commodities that preempt state gaming laws under the Commodity Exchange Act (CEA). It alleges that sports prediction markets are unlicensed sports bets and that they're subject to the state's regulation. Kalshi then sought a preliminary injunction that was denied by a U.S. District Court Judge and has since appealed to the Fourth Circuit, with oral arguments heard on May 7.

Massachusetts

Massachusetts sued Kalshi on the grounds that sports event contracts violated state gaming laws and was awarded an injunction that blocked Kalshi from offering sports contracts within the state. That case was then appealed to the Massachusetts Supreme Judicial Court, which appeared skeptical of Kalshi's arguments that their sports event contracts differed from sports betting. Sports event contracts remain banned in Massachusetts.

Michigan

An Ingham County Circuit Court judge has ordered Kalshi to temporarily shut down its operations in Michigan for two weeks. The state's attorney general argued Kalshi offers operations similar to sports betting, which requires a license from the Michigan Gaming Control Board.

Kalshi's head of communications confirmed it is complying with the court orders after failing to get the case moved to federal court. In a statement, Kalshi claimed to be subject only to federal jurisdiction, as it is licensed by the CFTC. 

Polymarket also filed a preemptive countersuit seeking a temporary restraining order (TRO) that would block enforcement, but was denied.

Minnesota

Minnesota became the first state to officially sign a law banning prediction markets on May 18 and it takes effect on Aug. 1. The law makes it a felony to host, advertise, or provide supportive services for platforms like Kalshi or Polymarket within the state. However, the CFTC filed a suit seeking an injunction on May 19 and the law is likely to face many challenges at the federal level.

Nevada

With a well-established state gaming commission to regulate sports betting, Nevada has also challenged Kalshi and Polymarket on the grounds that their sports, entertainment and political contracts require state gaming licenses. A district court judge delivered an injunction prohibiting Kalshi from operations and the Nevada Gaming Control Board also secured a preliminary injunction blocking Polymarket from operations. The rulings have been appealed to the Ninth Circuit.

New York

New York has offered a piece of legislation known as the ORACLE (Oversight and Regulation of Activity for Contracts Linked to Events) Act that is designed to more tightly regulate prediction exchanges and to even ban certain contracts. Meanwhile, the CFTC has preemptively countersued the state to block potential enforcement of any laws that it claims usurps their federal authority to oversee the industry. There was also a class-action lawsuit filed against Kalshi in the Southern District of New York.

Ohio

The Ohio Casino Control Commission levied a $5 million fine on Kalshi for violating state gaming laws on the basis that it was evading the state's established 20% tax on sports betting and had failed to meet age verification requirements. A lower court upheld those fines and the CFTC filed an amicus brief with the Sixth Circuit last month in an attempt to further challenge the ruling.

Rhode Island

The attorney general of Rhode Island filed a lawsuit against both Kalshi and Polymarket on May 21 that argued both were illegal gaming operations that were circumventing state gambling regulations and undercutting the state's sports betting and lottery revenues. The CFTC then filed a countersuit a week later on May 28, holding the line that event contract exchanges weren't subject to state laws as federally-regulated operations. Given the newness of these cases, there aren't any rulings yet for either side.

Tennessee

The Volunteer State also alleges that sites like Kalshi and Polymarket operate as unlicensed sportsbooks. However, in this case the CFTC was granted a federal injunction to block enforcement on the basis that contract swaps are financial instruments protected by the Dodd-Frank Act. Tennessee has also appealed that ruling to the Sixth Circuit and is seeking an expedited hearing.

Texas

Texas broadly bans most forms of gambling under its state constitution and state leaders have instructed state committees to begin investigations into Kalshi and Polymarket with designs on shutting them down. Those committees are expected to make their session recommendations in 2027, at which point the state may take further preventative action. However, Kalshi and Polymarket remain operational in Texas at the time of writing.

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Utah

Governor Spencer Cox and Attorney General Derek Brown have directly opposed prediction markets, arguing that they drive addiction and cause financial harm, and vowing to use all the resources at their disposal to ban them. As a result, Kalshi filed a preemptive lawsuit seeking to block state enforcement. No injunction has been granted yet, and Kalshi warns that it may be forced to geolocate and ban Utah users if one isn't issued soon.

Washington

Washington lawmakers also allege that prediction market sites like Kalshi and Polymarket are violating state laws and also took particular issue with marketing campaigns targeting 18-21 year-olds by using social media influencers. Kalshi and Polymarket both sought emergency injunctions preventing enforcement of state gambling laws on their platforms in the Ninth Circuit and were denied. Now the path has been temporarily cleared for state-level crackdowns in Washington and Nevada.

Wisconsin

The Wisconsin attorney general filed three lawsuits against Kalshi alleging that sports-based event contracts are functionally identical to casino sportsbooks. The CFTC has since countersued the state in an effort to further solidify its status as the sole federal regulators of prediction markets. The Ho-Chunk Nation has also filed a federal lawsuit alleging that the operation of prediction sites threatened authorized tribal gaming on their lands.

Responsible trading tools

Kalshi provides traders with tools intended to help people use their contract exchanges responsibly. However, Polymarket doesn't currently provide its users with built-in responsible trading tools and will require limits to be self-imposed. As prediction markets, they're both federally regulated by the Commodity Futures Trading Commission (CFTC) – an independent agency of the U.S. federal government – and are subject to market integrity guidelines. Here's a list of resources available on Kalshi:

• Trading breaks (temporarily pause from trading)

• Self-exclusion (permanently ban yourself from trading)

• Deposit limits (set maximum monthly deposits)

• Mental health support (partnered with Birches Health)

• Educational Guides (understand trading risks and how to trade responsibly)

• Account security (protect account with two-factor authentication)

Event contracts trading involves a risk of substantial loss and is not suitable for all investors. Participation in prediction markets is subject to applicable eligibility requirements. Participation may be restricted or prohibited in certain jurisdictions and participants are responsible for ensuring their participation complies with applicable laws and regulations in their jurisdiction.

Kalshi and Polymarket legal status FAQ

Is Kalshi legal in all states?

Kalshi is federally regulated by the CFTC, which allows it to operate in all 50 states. However, some of its event contracts (like sports prediction markets) aren't available in certain states. Additionally, the legal status is contested in other states. Sign up for Kalshi with the promo code CBSSPORTS here: 

Is Polymarket legal in the US?

After briefly being banned in the United States for failure to comply with the CFTC, Polymarket purchased a federally-regulated exchange and has resumed operations in the country on the Polymarket US app. Like with Kalshi, certain event contracts aren't available in some states and there are legal challenges that might impact the company in the future. Sign up for Polymarket with the promo code CBSSPORTS here:

Can you trade prediction markets in the US?

Prediction markets are currently qualified as exchanges and are regulated by the CFTC, so they can be legally used within the United States. However, there are efforts to ban certain elements of prediction market apps and several states are embroiled in lawsuits against the CFTC (an independent federal government agency). 

How many prediction platforms (or apps) are available in the US?

There are three prediction market platforms with active Designated Contract Market (DCM) registrations with the CFTC, with Forecast Ex joining Kalshi and Polymarket. However, there are a dozen more platforms with pending approval and several other platforms have found provisions in state gaming laws that allow them to operate.