Are Prediction Markets Legal? Kalshi vs Polymarket 2026

By Marcus Yeo · Published 2026-10-08 · Independent review — not affiliated with any exchange

Are prediction markets legal? The honest answer is: it depends entirely on the platform, your country, and in the US, sometimes your state. Kalshi operates as a CFTC-registered US exchange with mandatory identity checks, while Polymarket runs as an international crypto platform that leans on geoblocking rather than onboarding verification — and the two end up with very different country-by-country availability lists as a result. If you’ve typed some version of “are prediction markets legal” into a search bar recently, you’re not alone; both platforms have expanded fast in 2026 and the rules are still catching up in several jurisdictions.

This piece lays out what’s actually documented by each platform and by reputable third-party guides, not speculation. Where sources disagree or where something is a third-party claim rather than an official one, that’s flagged — these rules move quickly, so treat anything here as a starting point and confirm on the platform’s own page before you fund an account.

How Prediction Markets Actually Work

Both Kalshi and Polymarket trade the same basic instrument: a binary event contract. It settles to $1.00 if the outcome happens (a “Yes” position) or $0.00 if it doesn’t, and while the market is live it trades somewhere between 1 cent and 99 cents. That price is generally read as the market’s implied probability, a contract sitting at 70 cents suggests traders collectively see roughly a 70% chance of the Yes outcome.

This is real financial risk, not a simulation. Contracts can expire worthless, and depending on the country or US state you’re in, regulators may treat this activity as gambling, as a regulated derivative, or as something in between, which is a big part of why availability varies so much by location.

Is Kalshi Legal in the US?

Yes, in the sense that Kalshi is a CFTC-registered Designated Contract Market, a federally regulated exchange, not an offshore or unlicensed operator. Per Kalshi’s help center, because it’s regulated by the CFTC it must confirm the identity of every person who trades, through document verification: a photo of a valid, unexpired, legible government-issued ID such as a driver’s license or passport. During signup you also confirm your country of residence. This is explicitly not a no-KYC platform, which matters if you’ve seen it mentioned alongside crypto prediction markets that don’t require the same checks.

Per Kalshi’s own country page, it’s available in 143 countries and restricted in 52, with jurisdictions including Australia, Belgium, Canada, France, Italy, Poland, Singapore, Switzerland, Taiwan, Thailand, the UAE, the UK, China, Russia, Iran, Cuba and North Korea listed among the restricted (exact lists shift, and some third-party summaries also mention Ireland). US state-level availability is genuinely in flux: one third-party guide lists Arizona, Illinois, Massachusetts, Maryland, Michigan, Montana, New Jersey and Ohio as unavailable at the time it was written. That’s a snapshot, not a permanent map, some states dispute Kalshi’s offering under their own gambling statutes even though it’s federally registered, which is exactly the kind of jurisdictional tension that makes “is this legal” a harder question than it sounds.

Is Polymarket Legal in the US and Elsewhere?

Polymarket’s situation is structurally different. Per third-party guides, standard use of its international platform doesn’t require identity verification at all, you sign up with a wallet or email, deposit USDC, and trade, with compliance handled mainly through geoblocking rather than onboarding checks. That’s one reason it comes up in searches around crypto prediction markets no KYC.

For the US specifically: per Polymarket’s own geographic-restrictions documentation, the United States is listed as close-only on the original international platform, existing positions can be closed, but no new trades can be opened, a status that’s been in place since Polymarket’s 2022 CFTC settlement, according to third-party guides. Separately, a dedicated US exchange launched on iOS, Android and web with its waitlist removed in May 2026, per a third-party guide; every account on that US product must complete full verification before trading, and USD can be deposited via bank transfer/ACH or stablecoins.

Beyond the US, Polymarket’s documentation lists an extensive close-only roster on both frontend and API: Australia, Belgium, Canada (several provinces), France, Germany, Italy, Poland, Singapore, Taiwan, Thailand, the UK and many others, plus frontend-only close-only treatment for Ireland, Japan, the Netherlands and South Korea. OFAC-sanctioned territories such as Iran, Cuba, Syria and parts of Ukraine are blocked outright, per third-party summaries. None of this is a loophole to route around, restricted regions are restricted for legal reasons tied to each country’s own financial and gambling regulations, and using a VPN or similar method to bypass those restrictions violates the platforms’ own terms of service. If you’re not sure where you stand, the platform’s own country page is the only reliable source, and it’s worth rechecking periodically since these lists do change.

Kalshi vs Polymarket: A Side-by-Side Comparison

Treat this table as a snapshot of documented 2026 features, not a permanent comparison, both platforms update fees and geographic rules regularly.

Are Prediction Markets Gambling or Investing?

This is genuinely unresolved, and it’s the core of most of the legal disputes above. Kalshi’s contracts are licensed and structured as CFTC-regulated derivatives, which is the legal basis it relies on to operate in the US. Other regulators, in several of the countries on Kalshi’s and Polymarket’s restricted lists, have reached different conclusions about similar event-contract structures, sometimes treating them closer to wagering products under local gambling law. Neither “it’s investing” nor “it’s gambling” is a universally correct label; it depends on which country’s framework is being applied, and that framework can change. None of this is investment or legal advice, if you’re weighing whether to trade event contracts at all, that’s a decision to make with your own understanding of your local law, not based on a platform’s marketing.

For traders coming from standard crypto exchanges, the identity-verification contrast is worth noting too. Centralized exchanges like Binance require full KYC for most account tiers, similar in spirit to Kalshi’s approach, while Polymarket’s no-KYC-for-standard-use model sits closer to how many people first discover no-KYC crypto exchanges more broadly. If prediction markets and event contracts are new territory for you, it’s worth starting with the basics of how leveraged and derivative products work before funding either platform, our beginner learning path is a reasonable place to start.

The Practical Rule

Given how often these lists shift, the only durable rule is: check your own country’s law and the platform’s current availability page before you deposit anything. Kalshi and Polymarket (kalshi.com and polymarket.com) both publish their own restriction pages, and third-party guides can go stale fast when a regulator makes a new ruling. Treat every figure and list in this article as accurate as of October 2026 and subject to change without much notice.

Marcus Yeo — Trades perpetual futures full-time and has opened, funded and stress-tested accounts on more than 20 exchanges since 2019. Runs every withdrawal test himself.