Yes. As of September 2026, Americans can legally trade contracts on election outcomes through exchanges regulated by the Commodity Futures Trading Commission (CFTC), including Kalshi, PredictIt and Polymarket’s US platform. Federal courts cleared the way for election contracts in 2024, and the CFTC stopped fighting them in 2025. The open legal fight now is between the prediction market companies and several states, and it’s mostly about sports contracts rather than elections.
This is a fast-moving area. Here’s how it got here and what’s still unsettled. Nothing below is legal or financial advice.
How did election contracts become legal? #
For most of the last decade the CFTC, which oversees futures and other derivatives, blocked contracts on who wins elections. It argued they were a form of gaming that was “contrary to the public interest” under the Commodity Exchange Act.
Kalshi, a CFTC-registered exchange, asked to list contracts on which party would control the House and Senate. The CFTC said no in September 2023, and Kalshi sued. In September 2024 a federal judge in Washington, DC, ruled that the agency had exceeded its authority, and the appeals court declined to pause that ruling. Kalshi listed congressional control contracts weeks before the 2024 election. In May 2025 the CFTC dropped its appeal, leaving the ruling in place.
Which platforms are legal for US residents? #
| Platform | How it’s regulated | Status for US users (Sept. 2026) |
|---|---|---|
| Kalshi | CFTC-designated contract market | Open, with election contracts; some sports markets blocked in certain states |
| PredictIt | Regulated exchange since 2025, after a long dispute with the CFTC | Open; per-contract limit raised from $850 to $3,500 |
| Polymarket US | CFTC-licensed exchange acquired by Polymarket | Open through its US platform since late 2025 |
| Polymarket (international) | Offshore, crypto-based | Still separate; US users are directed to the US platform |
| Brokerages (Robinhood, Interactive Brokers’ ForecastEx, others) | Through CFTC-registered exchanges | Offer event contracts to eligible customers |
PredictIt #
PredictIt started in 2014 as an academic project of Victoria University of Wellington in New Zealand, operating under a CFTC “no-action” letter that capped each trader at $850 per contract and each market at 5,000 traders. The CFTC withdrew that letter in 2022, PredictIt sued, and the Fifth Circuit kept it open while the case went on. In July 2025 the dispute ended with PredictIt allowed to keep operating on much looser terms: the cap went to $3,500 per contract and the 5,000-trader limit was dropped. In September 2025 it won approval to operate as a regulated derivatives exchange.
Polymarket #
Polymarket paid a $1.4 million CFTC penalty in 2022 for offering unregistered swaps and blocked US users. After the 2024 election, federal investigators looked into the platform. The Justice Department and CFTC closed those investigations in July 2025 without charges. Polymarket then bought QCEX, a CFTC-licensed exchange, and received an amended order of designation from the CFTC in November 2025, which let it serve US customers through a separate US platform. Using a VPN to reach the international site from the US still breaks its terms.
Are prediction markets legal in every state? #
This is the unsettled part. Because these exchanges are federally regulated, they argue that the CFTC alone has jurisdiction and that state gambling laws don’t apply. Several states disagree, mainly because the exchanges also list contracts on sports games, which look a lot like sports betting.
By September 2026:
- Nevada regulators went after both Kalshi and Polymarket in 2026, including a civil complaint against Polymarket in January.
- Massachusetts won a preliminary injunction in January 2026 requiring Kalshi to block state residents from its sports markets.
- Minnesota passed a ban on these markets that took effect August 1, 2026, and the federal government sued the next day.
- Arizona filed criminal charges against Kalshi in March 2026, which were dismissed in May when a federal judge found the CFTC has exclusive jurisdiction.
- The CFTC has sued several states, asserting that federal law preempts their gambling rules for these exchanges.
Most of these fights target sports contracts, not elections. But the underlying question, whether states can regulate federally supervised event contracts at all, will decide both. Expect more appeals-court rulings, and possibly a Supreme Court case. If you live in a state that’s fighting these markets, check each platform’s current eligibility rules before you sign up.
Are prediction markets the same as sports betting? #
Legally, no. A prediction market contract is a derivative: it pays a fixed amount, typically $1, if an event happens and nothing if it doesn’t, and you trade it against other users on an exchange. State-licensed sportsbooks such as DraftKings and FanDuel are regulated by state gaming commissions and don’t take bets on US elections. That’s why the election contracts you see advertised are all on federally regulated exchanges.
The practical difference for you is protection. On a CFTC-regulated exchange your funds sit with a registered clearinghouse, prices are public, and the exchange must police manipulation and insider trading. Offshore sites offer none of that.
What about taxes and risk? #
The IRS hasn’t issued guidance written specifically for prediction market contracts, and how gains are taxed can depend on how the platform structures its contracts and what forms it issues. Keep records of every trade and ask a tax professional. Our guide to how prediction markets pay out covers fees and settlement.
The risks are the usual ones for any market: you can lose what you put in, thin markets can be hard to exit, and prices can swing on rumors. Markets have also been moved by large traders, which we cover in can election prediction markets be manipulated?.
Can you follow the markets without trading? #
Yes, and for most people that’s the more useful way to use them. Market prices are one signal about a race alongside polling, and they react to news faster than polls can. They also reflect who’s trading, which isn’t the same as who’s voting. Our comparison of prediction markets vs. polls covers when each has done better.
Election Tracker shows current Polymarket prices for watched races, like Senate and House control, next to its polling averages. The Market Sentiment tab is read-only: it takes no wagers, holds no money and needs no account, and it labels prices as trader sentiment rather than forecasts. It’s free on iPhone.
Frequently asked questions #
Is Polymarket legal in the US now? #
Yes, through Polymarket’s US platform, which runs on a CFTC-licensed exchange the company acquired. The CFTC approved the arrangement in November 2025. Some states are challenging prediction markets generally, so check whether your state is affected.
Is Kalshi legal in all 50 states? #
Kalshi operates nationwide under CFTC oversight, but several states have challenged its sports contracts in court, and some have won injunctions limiting those markets for their residents. Election contracts have faced far fewer state challenges. Check Kalshi’s current state eligibility list.
Can I bet on elections at a sportsbook? #
No. State-licensed sportsbooks in the US don’t offer wagers on American elections. Election contracts are only available on CFTC-regulated exchanges and the brokerages that route to them.
Can candidates trade on their own races? #
Exchanges ban trading on inside information, and Kalshi says it penalized several congressional candidates in 2026 for trading on their own campaigns. Using nonpublic information can also violate federal commodities law.
Are prediction market winnings taxable? #
Generally, yes. Profits are taxable income, but the exact treatment isn’t settled by specific IRS guidance. Keep records and consult a tax professional.