Last updated: April 2026
US and international prediction market legality. Polymarket, Kalshi, and CFTC regulation explained.
This page contains affiliate links. If you sign up through our links, OddsShift may earn a commission at no extra cost to you. This does not affect our analysis — we present the legal facts objectively.
Click any state to see platform availability, restrictions, and tax notes.
Where is Polymarket legal? As of March 2026, Polymarket is available in most US states through its QCEX partnership and in 100+ countries internationally via crypto wallets. Kalshi is legal in all 50 US states as a CFTC-designated contract market but is US-only. Prediction market legality depends on your location, the platform's regulatory status, and local gambling/financial regulations. Last updated:
Yes, prediction markets are legal in most countries. Polymarket is available in 100+ countries and most US states (via QCEX partnership since 2025). Kalshi is legal in all 50 US states as a CFTC-regulated exchange. Restricted areas: France, Cuba, Iran, North Korea, and US territories.
Last verified: April 2026 · Updated monthlyYes, Polymarket is legal in most US states as of April 2026. After settling with the CFTC in 2022 ($1.4M fine), Polymarket restructured and acquired QCEX, a CFTC-registered entity, to provide compliant US access. Polymarket is now available in 42+ states through this regulated pathway, with KYC required for all US users. However, Polymarket remains restricted in a handful of states where state gaming commissions classify event contracts differently: Montana, New Jersey, and Ohio currently block access, while Arizona, Illinois, Massachusetts, Maryland, Michigan, and Nevada have partial restrictions.
Internationally, Polymarket is accessible in 100+ countries via crypto wallets (USDC on Polygon). No KYC is required outside the US. Countries with strict crypto bans (China, Algeria, Bangladesh) effectively block access.
Kalshi operates as a CFTC-regulated Designated Contract Market (DCM) — the same federal license held by the Chicago Mercantile Exchange (CME), where trillions of dollars in futures and options trade annually.
Kalshi received its DCM designation from the CFTC in 2020, becoming the first exchange specifically approved to list event contracts for retail traders. This is the same license category held by CME Group, ICE, and Cboe — institutions that process trillions in derivatives annually.
What DCM status means in practice: the CFTC directly supervises Kalshi's operations, including market surveillance, financial audits, compliance reporting, and customer fund segregation. Kalshi must follow the same rules as any major US derivatives exchange. Unlike Polymarket, which accessed the US market through a partnership (QCEX), Kalshi holds its own direct federal license.
Notably, Kalshi has never faced a CFTC enforcement action — a clean regulatory record since launch. This matters because it demonstrates ongoing compliance, not just initial approval.
Legally, Kalshi's event contracts are classified as derivatives — specifically, binary options on real-world events. The CFTC, not state gambling commissions, has jurisdiction. This classification has been tested: in 2023, a federal court upheld the CFTC's authority to approve Kalshi's political event contracts, establishing that prediction markets fall under commodities law, not gambling law.
The tax treatment reinforces this distinction. The IRS treats Kalshi contracts under Section 1256 — the same tax code that applies to CME futures. This means Kalshi profits receive the favorable 60/40 split: 60% taxed at long-term capital gains rates, 40% at short-term rates, regardless of holding period. Kalshi also issues 1099-B forms, just like a stock brokerage.
However, some states interpret event contracts differently. Montana, New Jersey, and Ohio currently restrict access, classifying certain event contracts under state gambling statutes. This creates a gap between federal classification (derivatives) and state-level interpretation (gambling in some jurisdictions).
For a detailed breakdown of how prediction market profits are taxed, see our tax guide.
Kalshi's CFTC regulation means it operates within boundaries — not everything is permitted. The CFTC has prohibited contracts on terrorism, assassination, and certain other events deemed contrary to public interest. Sports event contracts were temporarily blocked by the CFTC in 2023 before Kalshi successfully challenged the decision in federal court.
In March 2026, US senators introduced legislation to ban prediction markets on sports outcomes, arguing they compete directly with state-regulated sportsbooks. The bill's outcome could reshape which contract categories Kalshi (and Polymarket) can legally offer. Political and economic event contracts face less regulatory risk.
These limitations actually demonstrate Kalshi's legitimacy: it operates within a defined legal framework with real boundaries, rather than offering everything in an unregulated environment.
500+ markets, non-custodial, global access.
Start on Polymarket → KalshiCFTC-regulated, Section 1256 tax benefit, 1099-B reporting.
Open Kalshi account →Not sure which is right for you? Compare platforms with live odds →
Both platforms are now accessible to US residents, but through different regulatory paths. Here's how each platform's legal framework works.
Kalshi's CFTC DCM status means it operates under the same regulatory framework as CME Group and other major US derivatives exchanges. This provides the highest level of legal certainty for US users.
Polymarket previously faced CFTC enforcement action in 2022 ($1.4M settlement). In 2025, it re-entered the US through a partnership with QCEX under an updated compliance framework. Its regulatory status is indirect compared to Kalshi's.
The legal classification of prediction markets depends on who you ask. Here's the regulatory reality and the ongoing debate.
The legal landscape for prediction markets has shifted dramatically since 2020. Here are the key milestones.
Kalshi becomes the first CFTC-regulated event contract exchange, receiving designation as a Designated Contract Market (DCM). This creates the legal precedent for prediction markets in the US.
Polymarket launches as a crypto-native prediction market on the Polygon blockchain. No CFTC registration. Available globally but operating in regulatory gray area for US users.
CFTC charges Polymarket with operating an unregistered exchange. Polymarket pays $1.4M settlement and agrees to wind down US-facing operations. US users lose access.
The 2024 US presidential election drives massive volume. Polymarket processes billions in trading. Public discourse shifts: prediction markets are seen as legitimate forecasting tools, not just gambling.
Polymarket partners with QCEX (a CFTC-compliant entity) to offer legal US access. KYC required for US users. Most states gain access, though availability varies. Polymarket processes $44B+ in total volume.
CFTC approves Kalshi's sports event contracts after legal battles. CNN partnership launches. Kalshi reaches $20B+ valuation with significant institutional adoption.
US senators introduce legislation to ban prediction markets on sports outcomes, arguing they compete with regulated sportsbooks. The bill's outcome could reshape which categories are legal on both platforms.
Polymarket serves 100+ countries via crypto wallets. Kalshi is currently US-only. Here's where each platform is available.
Available globally via crypto wallet (USDC). No KYC outside US. Some jurisdictions with strict crypto or gambling laws may restrict access.
Available exclusively to US residents. CFTC designation is a US-specific regulatory framework. International expansion has not been announced.
| Country | Polymarket | Kalshi | Status |
|---|---|---|---|
| United States | Most states (via QCEX) | All 50 states | Legal (CFTC regulated) |
| United Kingdom | Available (crypto) | Not available | Legal (FCA oversight, classified as financial instruments) |
| Germany | Available (crypto) | Not available | Legal (BaFin regulated, capital gains tax applies) |
| Canada | Available (crypto) | Not available | Grey area (no specific regulation, crypto access works) |
| Japan | Restricted | Not available | Restricted (gambling laws apply, crypto exchanges regulated by FSA) |
| Australia | Available (crypto) | Not available | Legal (ASIC oversight, licensed betting category) |
| Switzerland | Available (crypto) | Not available | Legal (FINMA regulated, crypto-friendly jurisdiction) |
| India | Available (crypto) | Not available | Grey area (no specific ban, 30% crypto tax applies) |
| Brazil | Available (crypto) | Not available | Legal (CVM oversight, growing market) |
| South Korea | Restricted | Not available | Restricted (gambling laws, crypto exchanges regulated) |
| UAE / Dubai | Available (crypto) | Not available | Legal (VARA regulated, crypto hub) |
| France | Blocked | Not available | Banned (AMF classification as gambling, Polymarket blocked since 2022) |
| Netherlands | Available (crypto) | Not available | Grey area (KSA oversight, crypto access works) |
| Singapore | Available (crypto) | Not available | Legal (MAS regulated, licensed digital asset services) |
| Turkey | Available (crypto) | Not available | Grey area (crypto payments banned but trading allowed) |