Where Prediction Markets Are Legal: All 50 States, Updated October 2026
Yes, prediction markets are legal in the U.S. Exchanges like Kalshi and Polymarket US are registered with the CFTC, the federal regulator for futures and derivatives, and most of their markets are available nationwide. Sports contracts are a different story. As of October 2026, court orders restrict sports contracts in Massachusetts, Michigan, Nevada and Washington. Courts have sided with the state in Ohio, Tennessee and Utah, so enforcement could come at any time. At least ten more states have active lawsuits or enforcement actions.
If you just want to know whether you can trade sports in your state, go to the table below. If you want to know why the answer keeps changing, read on.
“Legal” Means Three Different Things
When people ask whether prediction markets are legal, they’re usually asking one of three questions, and each has a different answer:
- Is the exchange legal? Yes, if it’s a CFTC-registered exchange (a “designated contract market”). Kalshi, Polymarket US and the CME-run exchange behind FanDuel Predicts and DraftKings Predictions all hold federal registration.
- Is this contract allowed in your state? That depends on the contract. Contracts on economics, finance and commodities are rarely challenged. Sports contracts are what states are fighting over, and a few states are also going after election and entertainment contracts.
- Will the app actually let you trade? That depends on the platform. Some apps geofence states after a court order. Others pull back on their own, and operator-backed apps follow their own rules about where they offer sports.
The table below covers the second question, which is the one that changes most often.
Prediction Market Legal Status by State
How to read this table:
- Restricted: a court order currently limits sports contracts on at least one major platform.
- At risk: a court has ruled for the state, and enforcement can begin or is underway.
- Contested: active lawsuits or enforcement actions, but sports contracts are generally still live.
- Available: no major court order or enforcement action against sports contracts. Individual platforms may still limit what they offer.
The “Legal sportsbooks?” column shows whether the state has legal sports betting in any form. It matters because FanDuel Predicts and DraftKings Predictions only offer sports contracts in states without their own sportsbooks.
| State | Legal sportsbooks? | Sports contracts | What’s happening |
|---|---|---|---|
| Alabama | No | Available | No major state action |
| Alaska | No | Available | No major state action |
| Arizona | Yes | Contested | State filed criminal charges against Kalshi; the CFTC sued Arizona, and a federal judge blocked the criminal case. Appeals continue. |
| Arkansas | Yes | Available | No major state action |
| California | No | Contested | Tribes are suing. The Ninth Circuit blocked Kalshi’s sports contracts on two tribal lands; they’re available elsewhere in the state. |
| Colorado | Yes | Available | No major state action |
| Connecticut | Yes | Contested | State sent cease-and-desist letters; the CFTC sued Connecticut in April |
| Delaware | Yes | Available | No major state action |
| District of Columbia | Yes | Available | No major state action |
| Florida | Yes | Available | No major state action |
| Georgia | No | Available | No major state action |
| Hawaii | No | Available | No major state action |
| Idaho | No | Available | No major state action |
| Illinois | Yes | Contested | Gaming Board sent cease-and-desist letters; the CFTC sued Illinois in April |
| Indiana | Yes | Available | No major state action |
| Iowa | Yes | Available | No major state action |
| Kansas | Yes | Available | No major state action |
| Kentucky | Yes | Available | No major state action |
| Louisiana | Yes | Available | No major state action |
| Maine | Yes | Available | No major state action |
| Maryland | Yes | Contested | Kalshi lost its bid for an injunction and appealed to the Fourth Circuit. Baltimore sued Kalshi and Polymarket in August. |
| Massachusetts | Yes | Restricted | A January 2026 court injunction bars Kalshi’s sports contracts. The state’s highest court heard the appeal in May but hasn’t ruled. |
| Michigan | Yes | Restricted | A September 1 state court order requires Kalshi to geofence sports contracts. Robinhood and Coinbase agreed to close their Michigan sports contracts. |
| Minnesota | No | Contested | First state to pass a law banning prediction markets. A federal judge blocked it before it took effect. |
| Mississippi | Yes (retail only) | Available | No major state action |
| Missouri | Yes | Available | No major state action |
| Montana | Yes | Available | No major state action |
| Nebraska | Yes (retail only) | Available | No major state action |
| Nevada | Yes | Restricted | The Ninth Circuit ruled for Nevada on August 28. Sports, election and entertainment contracts are blocked on Kalshi and Polymarket. |
| New Hampshire | Yes | Available | No major state action |
| New Jersey | Yes | Contested | Kalshi is protected by a Third Circuit injunction; New Jersey has asked the U.S. Supreme Court to take the case |
| New Mexico | Yes | Available | No major state action |
| New York | Yes | Contested | A federal judge denied Kalshi’s request for an injunction; Kalshi is appealing. The attorney general has warned platforms. |
| North Carolina | Yes | Available | No major state action |
| North Dakota | Yes | Available | No major state action |
| Ohio | Yes | At risk | The Sixth Circuit ruled for Ohio on September 25. Ohio sent cease-and-desist letters to ten operators with an October 16 deadline, and most kept operating. Kalshi has asked for a rehearing. |
| Oklahoma | No | Available | No major state action |
| Oregon | Yes | Available | No major state action |
| Pennsylvania | Yes | Available | No major state action |
| Rhode Island | Yes | Contested | Attorney general sued Kalshi and Polymarket in May; the CFTC countersued |
| South Carolina | No | Available | No major state action |
| South Dakota | Yes | Available | No major state action |
| Tennessee | Yes | At risk | The Sixth Circuit vacated Kalshi’s injunction. Enforcement can begin once the court’s mandate issues, which Kalshi’s rehearing request is delaying. |
| Texas | No | Available | State committees are investigating; recommendations are expected in 2027 |
| Utah | No | At risk | A federal judge ruled in August that Utah can apply its gambling laws. The Tenth Circuit denied Kalshi emergency relief. Utah sued Kalshi and two Susquehanna trading firms on October 20. |
| Vermont | Yes | Available | No major state action |
| Virginia | Yes | Available | No major state action |
| Washington | Yes (tribal retail) | Restricted | Courts cleared the state to enforce; Kalshi’s sports contracts are unavailable |
| West Virginia | Yes | Available | No major state action |
| Wisconsin | Yes | Contested | Attorney general filed lawsuits; the CFTC countersued; the Ho-Chunk Nation filed a separate federal suit |
| Wyoming | Yes | Available | No major state action |
Tribal lands are a separate case everywhere. Courts have blocked Kalshi on specific tribal lands in California, and FanDuel Predicts and DraftKings Predictions don’t offer sports contracts on tribal land in any state.
Why Sports Contracts Are Legal in Some States and Not Others
The federal argument
Prediction markets argue that sports contracts are swaps, a type of derivative that federal law places under the CFTC’s exclusive authority. If that’s right, states can’t apply their gambling laws to them, just as they can’t regulate stock options.
The state argument
States argue that a contract paying $1 if the Chiefs win is a sports bet, whatever it’s called. If that’s right, platforms need a state sports betting license, must follow state age limits and pay state gaming taxes.
Where the courts stand
Federal appeals courts have split, and the states are winning more often:
- Third Circuit (April): sided with Kalshi in New Jersey.
- Ninth Circuit (August): sided with Nevada, ruling that sports contracts are sports bets and not swaps. In September, it also sided with tribes in California.
- Sixth Circuit (September): sided with Ohio and Tennessee, and added that state law would apply even if the contracts were swaps.
Counting preliminary rulings across all cases, one tally puts states ahead in 38 of 43 decisions.
What Happens to Your Money If Your State Gets Blocked
Most legality guides skip this. If a court blocks sports contracts in your state while you hold open positions, what happens depends on the order and the platform. Two recent examples show the range:
- Michigan: after a state court order, Kalshi filed an emergency rule to force-close Michigan users’ open sports positions. The CFTC stopped that rule and ordered Kalshi to settle open trades normally.
- Massachusetts: the state’s proposed injunction would have let existing contracts run until they settled, but would not have let users sell early, on the grounds that selling counts as a new transaction.
In both cases, users didn’t lose access to their cash balances, but their ability to exit positions was in question. If you trade sports contracts in a Restricted, At risk or Contested state:
- Keep position sizes on long-dated contracts modest. Season-long futures are the most exposed, because they have the most time for a court order to land before they settle.
- Withdraw winnings you don’t plan to trade. Cash balances haven’t been frozen in any state so far, but there’s no reason to leave money sitting in a disputed market.
- Save your trade confirmations. If settlement is disputed later, you’ll want records of what you bought and when.
Is It Illegal for You to Use a Prediction Market?
So far, state enforcement has targeted the platforms, not individual users. Cease-and-desist letters, lawsuits and court orders have been aimed at the companies offering sports contracts. Minnesota’s blocked law would have made it a felony to host, advertise or support a prediction market platform, but it didn’t target users.
That doesn’t make every trade legally risk-free. It does mean the practical risk is losing access to a market, not facing charges. Follow the platform’s location rules. If an app geofences your state, using a VPN to get around it violates the platform’s terms, and you could lose your account.
Operator-Backed Apps Follow a Different Map
FanDuel Predicts and DraftKings Predictions don’t follow the same state map as Kalshi or Polymarket. Both companies hold state sportsbook licenses they don’t want to put at risk, so they only offer sports contracts in states where their sportsbook doesn’t operate: 18 states for FanDuel Predicts and 17 for DraftKings Predictions. That includes California, Texas and Georgia. Both have said they’ll pull sports contracts from any state that legalizes online betting.
In practice:
- If you live in a state with legal sports betting, these apps show you only finance, economic and commodity markets. Use the sportsbook instead.
- If you live in a state without legal sports betting, these are among the most established ways to trade on games, backed by companies regulators already know.
Are Prediction Markets Gambling?
Legally, that’s the open question, and the answer may differ by state and by contract. Federally, the CFTC treats event contracts as derivatives. Two federal appeals courts have now said sports contracts are sports bets. The IRS hasn’t said how prediction market winnings should be taxed, while sportsbook winnings are clearly gambling income.
For a side-by-side look at pricing, fees, live-bet delays and taxes, see our guide to prediction markets vs sports betting.
How to Check Whether a Market Is Legal Where You Are
Check the table above
For your state’s current status.
Check the platform’s eligible-states list.
Apps update these when court orders land, sometimes within days.
Check the contract category.
Sports contracts are the most restricted, and economic contracts the least.
Check the location rules for where you are, not where you live.
Prediction markets geofence based on your physical location, just like sportsbooks.
Ready to compare platforms? See our ranking of the best prediction markets, or check current offers on the Polymarket promo code, FanDuel Predicts promo code and DraftKings Predictions promo code pages. For licensed sportsbooks, see where sports betting is legal.
Prediction Market Legality FAQ
The exchanges are federally registered and available in every state, but sports contracts aren’t. As of now, sports contracts are restricted by court order in Massachusetts, Michigan, Nevada and Washington, at risk in Ohio, Tennessee and Utah, and contested in at least ten other states.
Sports contracts are available without major legal challenges in about 33 states, including Florida, Georgia, Pennsylvania and North Carolina. They’re also live in most contested states, such as New Jersey, New York, California and Illinois, while lawsuits continue.
Yes. Kalshi is a CFTC-registered exchange. Its sports contracts aren’t available in Michigan, Nevada, Washington or Massachusetts, and courts have ruled for the state in Ohio, Tennessee and Utah.
Yes, through Polymarket US, which operates as a CFTC-registered exchange. Like Kalshi, it’s blocked from offering certain contracts in Nevada and faces challenges in several other states.
Possibly. New Jersey has asked the Court to take its case against Kalshi, and 39 states plus D.C. support the request. The Court hasn’t agreed to hear it yet. If it does, a ruling would likely come in 2027.
FanDuel and DraftKings only offer sports contracts in states where they don’t run a sportsbook, to protect their state betting licenses. In states with their sportsbook, their prediction apps offer only finance and economic markets.
It depends on the court order. In Michigan, the CFTC required open trades to settle normally. Massachusetts proposed letting contracts settle but blocking early sales. Keep long-dated positions modest in contested states.
This page is general information, not legal advice. Laws and court orders change quickly; check each platform’s current eligibility rules before trading.
