Are Prediction Markets Legal in the US? 2026 State Checker

Prediction markets, commonly referred to as ‘event contracts’ by regulators, have exploded. These contracts share the hallmarks of traditional binary options, which is why, in part, they have drawn the heat of regulators in the US. CFTC-regulated venues often take the position that federally listed contracts are available under Commodity Exchange Act preemption, which is the idea that federal law supersedes the state-level stance, but that is being contested by states like New York, Illinois, and Arizona, which take a particular issue with sports betting contracts. The result has been conflicting court rulings.

To help clarify the legal position for US citizens, we’ve built the checker below, which shows the legal status of prediction markets in each of the 50 United States. States are sorted alphabetically.

Table Key:

• Available = No state enforcement, court order, or access restriction. Platform access may still vary and it does not mean the state has formally legalized prediction markets trading or its operators.
• Watchlist = Pending bill, age limitation, indirect restriction, or policy review could affect access.
• Disputed = Active litigation, cease-and-desist activity, or federal-state preemption dispute.
• Restricted = Court order, licensing rules, or state enforcement limiting access, especially for sports.

Category Access:

• Open = Generally available through CFTC-regulated platforms.
• Watch = No block, but legislation, policy review, age limits, or indirect rules may affect access.
• Disputed = Active state-federal conflict, enforcement activity, or litigation risk.
• Blocked = Court order, licensing rules, or state enforcement restricting access.

Federal-State Conflict Score:

Our proprietary 1–10 metric measures the conflict between CFTC-regulated access and state-level gambling, consumer-protection, tribal-gaming, or enforcement resistance. It is based on editorial judgement.

• 1–3 Low: Little state conflict or progressive movement toward aligning with the CFTC.
• 4–6 Moderate: No direct enforcement, but state gambling law, pending bills, age limitations, tax, or sports-betting sensitivity creates uncertainty.
• 7–8 High: Active state challenge, cease-and-desist activity, tribal challenge, litigation, or sports-contract restriction.
• 9–10 Severe: Direct CFTC-versus-state litigation, court order, state enforcement stance, criminal/regulatory threat, or practical platform blocking.

This is for general information and should not be considered legal or investment advice. Regulations and access concerning event contracts are changing quickly. While we endeavor to keep this tracker up to date, we recommend confirming the legal status with the relevant platform and, where needed, the appropriate state regulator or qualified legal adviser. 

Will Prediction Markets Become Illegal In The US?

Probably not. Our view is that prediction markets are likely to become more available in the US. Retail investors clearly want to deal in them, and the volumes have gotten to a size that state regulators may struggle to cage the beast. Also, at the federal level, the CFTC is arguing that CFTC-listed event contracts are federally regulated derivatives, not gambling products that should be regulated at the state level. And it sued Arizona, Connecticut, and Illinois on April 2, 2026, and then New York on April 24, 2026, to defend that position.

Yet we are seeing it become more complicated at the federal level with Congress stepping in. March 2026 saw lawmakers introduce legislation with the aim of stifling prediction market platforms, including the bipartisan Prediction Markets Are Gambling Act, which takes aim at sports and casino-like event contracts. The broader STOP Corrupt Bets Act also seeks to put a far-reaching ban on contracts tied to elections, government events, sports, and military operations.

States are also not going to simply step aside, especially when it comes to sports-related contracts, which look and feel closest to sports betting, i.e. gambling. Nevada, Massachusetts, Ohio, and Maryland all had early litigation success on this front. Nevada also went further with more restrictions that require a gaming license for Kalshi, one of the largest operators, to offer event-based contracts to its residents.

In the near-term, we expect it to continue to be a legal and access minefield, especially in the sports contract category. Eventually, we expect prediction markets to be available at the federal level, with some restrictions in some states.

1. Some states will accept that they are CFTC-regulated markets and put up minimal resistance. We suspect this could include Texas, Florida, Pennsylvania, Colorado, North Carolina, Missouri, Oregon, Alabama, Kansas, and Wyoming.
2. Some will try to prohibit specific categories and make it less attractive with rules on taxes, age limits, and marketing. We suspect this could include California, Iowa, Kentucky, Minnesota, Vermont, Virginia, Georgia, and Hawaii.
3. Some states will fight hard to restrict sports-related contracts. We suspect this could include Nevada, Massachusetts, New Jersey, New York, Illinois, Ohio, Maryland, Michigan, Washington, Connecticut, Arizona, Wisconsin, New Mexico, Tennessee, and Montana.

Whichever way the legal cards end up falling, we believe that prediction markets are extremely similar to binary options. They’ve just been repackaged and rolled out to categories beyond finance to attract more customers. For this reason, traders must still follow a disciplined plan and practice careful risk management.

As with all such products, it’s how they’re approached by the customer that determines whether they’re used like a legitimate trading vehicle or for reckless gambling.

Head to our event contracts guide to learn more about how prediction markets work, how they overlap with binaries, and the best platforms for trading event contracts.