US Prediction Market Tracker: Legal Status & Regulations by State

Prediction markets have become a hotbed for legal and regulatory disputes, with both states suing prediction market platforms and the Commodity Futures Trading Commission suing states.

Some of the latest lawsuits filed by the CFTC include those against Kentucky on June 23 and against New Mexico on June 12. The lawsuit against Kentucky comes as the state is attempting to shut down prediction markets, and the lawsuit against New Mexico comes as the state is attempting to apply state gaming laws against CFTC-registered contract markets.

New Mexico has also filed lawsuits against Kalshi, alleging that the company is violating tribal gaming laws. As for another lawsuit involving the CFTC and states, in April the CFTC filed a lawsuit against Arizona, Connecticut, and Illinois, alleging that state gambling laws are “unconstitutional and invalid” when applied to prediction markets.

Additionally, the latest prediction market legal news came on August 29, when the Ninth Circuit ruled 3-0 that states can regulate prediction markets, which created a split with the Third Circuit. Now, New Jersey is attempting to take it to the Supreme Court. 

This page will serve as an ongoing prediction market tracker, examining prediction markets' legality and all of the latest court cases and rulings that impact regulation. This will also help you answer the question of “Where are prediction markets legal?”

States not listed below currently have no major public enforcement actions, litigation, or legislation specifically targeting prediction markets.

Below are some of the most impactful and consequential lawsuits involving prediction markets.

Commonwealth of Massachusetts v. Kalshi

In January 2026, a Massachusetts judge ruled that sports-event contracts from Kalshi were subject to the state’s sports-betting laws. It also issued a preliminary injunction that prohibited the company from offering any sports contracts until it got a gaming license. The lawsuit determined that, yes, CFTC oversight can exist, but so too can state gambling regulation. Kalshi appealed the decision, and as of May 2026, the Massachusetts Supreme Court appeared to be on the state's side.

Kalshi v. New York State Gaming Commission

In July 2026, Judge Analisa Torres denied Kalshi’s hope of blocking the state from enforcing gambling laws against prediction market platforms. The judge cited New York’s interests in preventing gambling addiction and preserving sports integrity. Later, the CFTC ordered Kalshi to continue offering contracts in the state despite a lawsuit from the state. 

Kalshi v. CFTC

In October 2024, Kalshi won a lawsuit against the CFTC that ultimately allowed the company to relist election prediction markets. This set a precedent across the entire prediction market landscape. This also allowed for prediction markets to expand into other contract areas, such as sports. 

Kalshi v. Tennessee Sports Wagering Council

Unlike in Massachusetts, Kalshi actually got a minor win in Tennessee. The court found that Kalshi was likely to succeed based on the merits of the questions. It concluded that Kalshi’s contracts likely qualify as “swaps” and also that Kalshi could not simultaneously comply with state restrictions and federal requirements.

Prediction market platforms allow traders to buy and sell contracts tied to the outcome of an event. These can include anything from weather and technology to elections, politics, finance, crypto, and even sports.

With prediction market platforms, instead of wagering against a sportsbook, traders will make and execute trades based on prices that reflect the market’s estimated probability of something happening.

In trading these contracts, if you buy a position and it happens, a fixed amount is paid out, typically $1 per contract. You can also sell before an event ends or happens, potentially leaving a bad trade early, taking some profit, and moving on.

There are two sides of the argument when it comes to prediction markets. Supporters argue that these allow for more accurate event forecasting because they involve thousands of participants, but those against them say that, especially when it comes to sports event contracts, they mimic online sports betting.

The main difference between online sportsbooks and prediction markets' legality is that prediction market platforms are federally regulated and overseen by the Commodity and Futures Trading Commission as Designated Contract Markets. The law that allows all of this to operate is the Commodity Exchange Act. Having the CFTC's stamp of approval allows these companies to list contracts without needing state-by-state approval. The CFTC will review the contracts.

As for traditional sports betting, it’s much different. When the Professional and Amateur Sports Protection Act was overturned in 2018, this allowed for individual states to pass legal sports betting legislation. Each state has a governing body that issues licenses.

Now, the main legal battle is whether something like sports event contracts falls under the federally regulated exchange products or if they’re, more or less, sports betting and should require a sports betting license from each state.

These questions lead to the question of “Are prediction markets legal in the US?” and right now, the answer is that they’re available with plenty of pending lawsuits. When it comes to states banning prediction markets, the only state that has passed legislation is Minnesota.