Are Polymarket and Kalshi legal in the US, and what did the 2024 court ruling decide?
In 2024 a federal court said political events are not automatically "gaming", and election markets went mainstream. The argument over who regulates them is still going.
It depends on the platform, the product and the state, and as of October 2026 the question is still being fought in court. Kalshi has been licensed since November 2020 by the Commodity Futures Trading Commission, or CFTC, the federal agency that regulates markets. Polymarket was kept away from US customers from 2022 after a CFTC action, and came back after the agency granted it an amended order of designation in November 2025. The 2024 court ruling decided that the CFTC could not block Kalshi's election contracts by calling them "gaming".
The CFTC was created in 1974 and regulates US markets, including futures, swaps and certain options. Kalshi launched in July 2021 as a , the first regulated platform to trade directly on the outcomes of events. Polymarket took another route: in January 2022 the CFTC fined it $1.4 million and ordered it to stop, including for failing to register.
The 2024 ruling is the turning point. In 2023 the CFTC tried to block Kalshi's contracts on which party would control Congress, arguing they were "gaming" and contrary to the public interest. Kalshi sued. In 2024, the federal district court in Washington ruled that the CFTC had exceeded its , holding that political events did not inherently constitute "gaming" under the law. An appeals court then refused the CFTC a , and in October 2024 Kalshi relisted its election markets. The CFTC later dropped its appeal, and platforms expanded quickly.
Kalshi
- Its contracts serve the public interest
- It took the CFTC to court
- The court held the CFTC overstepped its authority
The CFTC (2023)
- Contracts constituted "gaming"
- Contrary to the public interest
- Lacked resources to oversee them
That settled elections, not sports. As of 2026, is being litigated between the CFTC, which asserts that it alone is in charge, and states that see sports contracts as gambling. The rulings have split: in March 2026 a federal judge in Ohio ruled that Kalshi's products amounted to gambling under the state's jurisdiction, while in May 2026 a federal judge dismissed Arizona's criminal charges against Kalshi, ruling that federal law preempts state law. Concerns about election integrity have also been raised by consumer advocacy groups and politicians.
Quiz me
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Recap
Legal status here is dated and contested: as of October 2026, the CFTC and several states were still fighting in court over who has jurisdiction, especially over sports.
💡 A trick to remember it · A word on a rulebook can open a market: the court read "gaming" narrowly, and the question is still not closed.
Surprising fact · In 2024 a federal court held that political events are not inherently "gaming", and an appeals court refused the CFTC a stay.
Connects to
- ⚽ Is a prediction market just sports betting by another name?
- 🤫 Is insider trading a problem on prediction markets?
- 🌽 What are the Iowa Electronic Markets, and did they really beat the polls?
- 🔮 What is a prediction market, and how does a price become a probability?
- 📈 How do you measure how steep a curve is at a single point?
- 🗳️ Can you win an election with fewer than half the votes?
- Mechanism design
Sources (4)
No source, no claim. Every fact in this lesson (26 claims) cites at least one of these.