Legal Status of Prediction Markets in the U.S. as of 2026

Prediction markets are federally regulated and legal across all 50 states and Washington, DC, as of August 2026. However, the ability to trade sports event contracts varies by state due to ongoing legal challenges and restrictions imposed by several states.

While platforms like Kalshi and Polymarket operate under the oversight of the Commodity Futures Trading Commission (CFTC), some states have initiated lawsuits or enforcement actions that could limit access to these markets. For instance, Arizona has filed criminal charges against Kalshi, while California faces challenges from tribal entities regarding its sports betting laws.

States such as Massachusetts and Michigan have imposed restrictions on sports event contracts, and Nevada has the most stringent regulations, blocking major platforms entirely. The legal landscape is dynamic, with states frequently shifting between available, contested, and restricted statuses based on court rulings and legislative actions.