ARE KALSHI AND POLYMARKET LEGAL?
Both run federally regulated US exchanges. Both are being sued by state regulators over the same contracts. This page gives the federal answer, the state answer, and the answer nobody can give you yet — with the court filing or regulator page behind each one.
★ The short answers
Federally, yes: KalshiEX has been a CFTC-designated contract market since November 2020, so its event contracts trade as derivatives under federal rules rather than under state gambling licences (CFTC designation, 2020, 2026-10-21). US members must be 18 or over and pass identity checks (Kalshi FAQ). The complication is state courts: customers in Nevada, Washington and Michigan are currently cut off from its sports and event contracts while those cases run (CoinDesk on state blocks, checked 2026-10-21).
It depends which Polymarket. polymarket.com is the international, non-custodial crypto venue: US users are prohibited and the United States sits on its own close-only list (Polymarket on record) (Polymarket geoblock docs, 2026-10-21), and its operator paid a $1.4 million CFTC penalty in 2022 for running an unregistered facility for event-based binary options (CFTC order, 2022). polymarket.us — QCX LLC — is a separate CFTC-designated exchange, designated in July 2025 (QCX designation, 2025). New York sued it for unlicensed gambling on 24 September 2026; the case is pending (New York v. Polymarket US).
No. Three federal appeals courts have split on whether federal law displaces state gambling law for sports event contracts, and petitions asking the Supreme Court to settle it were pending when we checked (Supreme Court docket 26-299, 2026-10-21). What you can rely on is narrower: each venue's own geofence and rulebook decide whether you can trade, and those change without much notice.
⬡ Is Kalshi legal?
Kalshi's legal basis is a federal designation, not a state licence. That single fact explains both why it can offer election and economic contracts nationwide and why state gaming regulators keep suing it.
The federal status
- › KalshiEX LLC received an Order of Designation as a designated contract market from the CFTC in November 2020 (CFTC designation, 2020, 2026-10-21).
- › A designated contract market is a federally supervised derivatives exchange. Its contracts are cleared and traded under the Commodity Exchange Act, not under a state sports-betting statute.
- › US membership requires identity verification, and Kalshi sets its minimum age at 18+, which its own FAQ contrasts with the 21+ used by licensed sportsbooks (Kalshi FAQ).
The state complication
- › Kalshi argues that federal regulation governs these contracts even where sports betting is prohibited, and states disagree (Kalshi FAQ).
- › Nevada: a preliminary injunction was entered on 18 May 2026, and a July agreement committed Kalshi to geofencing the state, with a $120,000-per-day penalty for missing the deadline (Nevada Gaming Control Board, 2026-10-21).
- › Washington: a King County judge ordered a sharp cutback in August 2026 (Washington order, Aug 2026, 2026-10-21). Michigan is the third state where customers are currently blocked (CoinDesk on state blocks).
- › Massachusetts: the attorney general secured a preliminary injunction in January 2026 (Massachusetts injunction, 2026-10-21); it is on hold while Kalshi appeals, and the state's highest court heard argument in May 2026 without a ruling so far (Reuters on Massachusetts SJC).
Outside the United States, Kalshi does accept members from many countries — but eligibility is governed by its Member Agreement, which is where the country restrictions actually live, and that document changes between versions (Kalshi international access, 2026-10-21) (Kalshi Member Agreement). Two practical differences: from abroad you fund by debit card, crypto or a wire of $1,000 or more, because ACH, PayPal and Venmo are US-only; and whatever country you sign in from, you are using the US exchange's rulebook (Kalshi international access).
What we will not do: publish a definitive state-by-state list. Kalshi's own geofence is the operational truth, and it has changed more than once this year. Check the venue, then check your state regulator.
⬡ Is Polymarket legal?
Two different products wear the Polymarket name, and the legal answer is different for each. They do not share users, currency or a rulebook.
polymarket.com — international
- › Non-custodial and crypto-based: you hold your own keys and collateral sits in a smart contract (Polymarket on record).
- › US traders are prohibited, and the United States is on Polymarket's own close-only list (Polymarket geoblock docs, 2026-10-21).
- › In 2022 the CFTC ordered Blockratize, Inc. (d/b/a Polymarket) to pay a $1.4 million penalty, wind down non-compliant markets on polymarket.com and cease violating the Commodity Exchange Act (CFTC order, 2022).
polymarket.us — United States
- › Operated by QCX LLC as a designated contract market and derivatives clearing organisation, trading in US dollars (What is Polymarket US).
- › Designated on 9 July 2025 (QCX designation, 2025); a 24 November 2025 amended order removed the provision that had barred futures commission merchants from carrying customer accounts (QCX amended order, 2025).
- › KYC is mandatory: legal name, address, date of birth, Social Security number and phone, plus a government ID and selfie if the automated check needs more (Polymarket US signup).
- › The two products are separate: the international venue is crypto-based, while Polymarket US is fiat-based and trades in US dollars (What is Polymarket US), and New York's filing says the US platform opened to the public in December 2025 (New York v. Polymarket US).
Where the international product is restricted
Polymarket documents three tiers, and the distinction matters: "block completely" means no new orders and no closing existing positions, while "close-only" means you can exit but not open (Polymarket geoblock docs, 2026-10-21).
| Tier | Where | Examples |
|---|---|---|
| Block completely | Site and API | Iran, Syria, Cuba, North Korea, plus Crimea, Donetsk and Luhansk |
| Close-only | Site and API | United States, United Kingdom, France, Germany, Australia, Brazil, Italy, Poland, Russia and others |
| Close-only | Site only | Ireland, Japan, Malta (sports), Netherlands, South Korea |
Polymarket also publishes a country table in its Help Center, and the two lists are not identical — where they differ, the geoblock endpoint is the operational check (Polymarket geo Help Center).
The New York lawsuit against Polymarket US
On 24 September 2026 the New York Attorney General and the Governor announced a lawsuit against QCX LLC d/b/a Polymarket US, alleging an unlicensed gambling operation and seeking an injunction, disgorgement, restitution and penalties (New York v. Polymarket US). The verified petition alleges that the US app was open to 18 to 20 year-olds in a state where mobile sports betting requires 21 (NY verified petition). Polymarket sued the state in federal court the same day, arguing that its contracts are swaps under the CFTC's exclusive jurisdiction (Polymarket countersuit). Nothing has been decided.
Note that these are allegations in a filing, not findings. Nevada is the state where Polymarket US availability has visibly changed: the state ordered the platforms to stop operating there (FOX5 on Nevada and Polymarket, 2026-10-21).
⊚ Why there is no single answer yet
The argument is not about whether these platforms are legal in some abstract sense. It is about whether a contract traded on a federally designated exchange can be regulated as gambling by the state where the customer is sitting. The CFTC and three appeals courts have now answered that differently.
The regulator's position
The CFTC says it has exclusive jurisdiction over event contracts traded on designated contract markets, and it has sued the states that moved against exchanges: Arizona, Connecticut and Illinois on 2 April 2026 (CFTC v. Arizona, Connecticut, Illinois), New York on 24 April (CFTC v. New York), Wisconsin on 28 April (CFTC v. Wisconsin), Minnesota on 19 May (CFTC v. Minnesota), Rhode Island on 28 May (CFTC v. Rhode Island) and New Mexico on 12 June (CFTC v. New Mexico). On 11 August 2026 it went further and issued an emergency order directing KalshiEX to keep operating in accordance with its normal practices, after New York sought a restraining order (CFTC emergency order, Aug 2026, 2026-10-21).
The appeals courts, so far
| Court | Case | Decided | Holding |
|---|---|---|---|
| Third Circuit | KalshiEX v. Flaherty (No. 25-1922) | 2026-04-06 | Federal law preempts New Jersey gambling law, 2-1 — Kalshi wins. (Third Circuit, Apr 2026) |
| Ninth Circuit | KalshiEX v. Assad (No. 25-7516) | 2026-08-28 | Sports event contracts are not "swaps", so Nevada law applies — states win. (Ninth Circuit, Aug 2026) |
| Sixth Circuit | KalshiEX v. Schuler (Nos. 26-3196/5235) | 2026-09-25 | Not swaps, and no express or implied preemption — states win. (Sixth Circuit, Sept 2026) |
Read together, the Ninth and Sixth Circuit opinions turn on whether an event contract fits the statutory definition of a swap — not on whether the topic is sport, politics or the weather. The Ninth Circuit also sent the election-contract question back to the district court (Ninth Circuit, Aug 2026).
What the Supreme Court has been asked to do
New Jersey petitioned for certiorari in Flaherty v. KalshiEX, LLC, No. 26-299 on 2 September 2026; the petition was docketed on 8 September and the response deadline was extended to 9 November 2026. There was no order on it when this page was checked (Supreme Court docket 26-299, 2026-10-21). Ohio, 38 other states and the District of Columbia filed an amicus brief urging review on 7 October 2026, and a second petition from Crypto.com (No. 26-344) is also pending (States’ amicus brief, Oct 2026).
Until that is resolved, "is it legal?" has three answers at once: yes under the federal derivative regime, sometimes no under a state court order, and unresolved as a matter of appellate law. The practical test for a reader is not philosophical — it is whether the venue will let you open an account and place an order from where you are.
◇ What is a prediction market?
A prediction market is an exchange where the thing being bought and sold is a yes/no contract on a future event. The CFTC and the courts call these event contracts; the industry calls the venue a prediction market. The contract is the product, and its price is the market's estimate of how likely the event is.
A contract priced at 62 cents is a market saying roughly a 62% chance the event happens (What is Polymarket US). Nobody sets that number: it comes from orders other traders are willing to fill.
A contract settles at $1 if the outcome happens and $0 if it does not (What is Polymarket US). Buy at 55 cents and a win returns 45 cents per contract; a loss returns nothing.
Unlike a sportsbook bet, the position can be sold before the event resolves, so a move in the odds can be banked without waiting for settlement (What is Polymarket US).
There is no house on the other side. Polymarket US describes its matching as a central limit order book: your order meets another user's order, and the venue says it does not take the other side of trades or set prices (What is Polymarket US). That is the structural difference from a sportsbook, and it is the reason the legal fight is about derivatives law rather than betting licences.
Money is locked up, not lent. The CFTC's designation order records that contracts on the Polymarket US exchange are cleared on a fully collateralised basis by a registered clearing organisation (QCX designation, 2025). You are not trading on margin against the exchange.
The legal question is a definition question. The Commodity Exchange Act gives the CFTC exclusive jurisdiction over "swaps". Whether an event contract is a swap is precisely what the Third, Sixth and Ninth Circuits answered differently (Sixth Circuit, Sept 2026) (Ninth Circuit, Aug 2026). Everything else on this page follows from that.
≡ Who can trade where
A summary of the four things a reader usually means by "Kalshi" or "Polymarket". Eligibility is set by each venue, not by this page; the sources for every row are linked in the sections above.
| Product | Regulator | Currency | Eligibility |
|---|---|---|---|
| Kalshi (US) | CFTC designated contract market | USD | US, 18+, identity verified. Sports and event contracts geofenced in Nevada, Washington and Michigan as of August 2026 |
| Polymarket US (QCX LLC) | CFTC designated contract market and clearing house | USD | US, identity verified including SSN. State availability set by the venue and by litigation; New York sued in September 2026 |
| Polymarket (international) | No US registration for this product | Crypto (USDC) | Non-US users only; US prohibited. Long restricted list, three tiers |
| Kalshi (from abroad) | Same US exchange and rulebook | USD, card, crypto or wire | Many countries accepted; the restrictions live in the Member Agreement |
Not legal advice
This page summarises public regulator filings, court opinions and venue documentation. It is not legal advice, it is not a recommendation to trade anywhere, and it does not establish whether you personally may use any of these products. Gambling and derivatives rules differ by state and country, change without notice, and can turn on facts this page does not know about you.
If the answer matters legally — for a company, a licence, a tax position or a dispute — talk to a lawyer qualified in your jurisdiction. For everything else, the three checks below are what this page would do in your position.
- The venue's own eligibility or geofence page, not a marketing page.
- The venue's rulebook or member agreement, where country and state restrictions live.
- Your state gaming or securities regulator's site, for injunctions in force this week.
→ Related pages
⌗ Sources (33)
All links were opened on 2026-10-21. Where a document carries its own date, the note says so; that date is when it was issued, not when we read it. Legal documents can be replaced without the URL changing, so re-check before relying on a claim.
- CFTC — CFTC Designates KalshiEX LLC as a Contract Market (Release 8302-20) checked 2026-10-21· Release dated 2020-11-04.
- CFTC — Order against Blockratize, Inc. d/b/a Polymarket (Release 8478-22) checked 2026-10-21· Release dated 2022-01-03; $1.4 million penalty.
- CFTC — Order of Designation: QCX LLC (Polymarket US) checked 2026-10-21· Order dated 2025-07-09.
- CFTC — Amended Order of Designation: QCX LLC d/b/a Polymarket US checked 2026-10-21· Issued 2025-11-24; vacates the provision barring FCM intermediation.
- CFTC — CFTC Sues Trio of States to Reaffirm its Exclusive Jurisdiction Over Prediction Markets (9206-26) checked 2026-10-21· Release dated 2026-04-02.
- CFTC — CFTC Sues New York Over Prediction Markets (9218-26) checked 2026-10-21· Release dated 2026-04-24.
- CFTC — CFTC Sues Wisconsin to Reaffirm its Exclusive Jurisdiction (9220-26) checked 2026-10-21· Release dated 2026-04-28.
- CFTC — CFTC Sues Minnesota to Block State Law (9233-26) checked 2026-10-21· Release dated 2026-05-19.
- CFTC — CFTC Sues to Block State Enforcement in Rhode Island (9238-26) checked 2026-10-21· Release dated 2026-05-28.
- CFTC — CFTC Sues New Mexico (9251-26) checked 2026-10-21· Release dated 2026-06-12.
- CFTC — Emergency Order: Market Emergency Declaration (KalshiEX) checked 2026-10-21· Order dated 2026-08-11.
- KalshiEX LLC v. Flaherty, No. 25-1922 (3d Cir.) checked 2026-10-21· Decided 2026-04-06; 2-1, CEA preemption found, Roth J. dissenting.
- KalshiEX LLC v. Assad, No. 25-7516 (9th Cir.) checked 2026-10-21· Filed 2026-08-28; contracts held not to be swaps.
- KalshiEX LLC v. Schuler, Nos. 26-3196/5235 (6th Cir.) checked 2026-10-21· Decided 2026-09-25; no swap status, no preemption.
- Supreme Court — Flaherty v. KalshiEX, LLC, No. 26-299 (docket) checked 2026-10-21· Petition filed 2026-09-02; response due 2026-11-09; no order as of this date.
- Brief of Ohio and 38 other states and D.C., No. 26-299 (U.S.) checked 2026-10-21· Filed 2026-10-07; also lists the Crypto.com petition, No. 26-344.
- Nevada GCB — Kalshi agrees to geofence Nevada checked 2026-10-21· Release 2026-07-24; injunction entered 2026-05-18; $120,000/day penalty.
- Washington State Standard — Kalshi ordered to sharply curtail operations in WA checked 2026-10-21· Published 2026-08-13.
- CoinDesk — Kalshi off-limits in multiple states checked 2026-10-21· Published 2026-08-22; names Nevada, Washington and Michigan.
- Mass.gov — AG Campbell secures court order blocking Kalshi sports wagers in Massachusetts checked 2026-10-21· Statement dated 2026-01-20.
- Reuters — Massachusetts top court appears open to state ban on Kalshi sports betting checked 2026-10-21· Published 2026-05-04; no ruling as of this date.
- New York Attorney General — Lawsuit against Polymarket for running illegal gambling checked 2026-10-21· Filed 2026-09-24.
- New York v. QCX LLC d/b/a Polymarket US — verified petition checked 2026-10-21· Filed 2026-09-24; alleges the US app was open to 18-20 year-olds.
- QCX LLC d/b/a Polymarket US v. James — complaint, S.D.N.Y. checked 2026-10-21· Filed 2026-09-24; preemption and swap-status theory.
- Polymarket — On Record (two platforms, same brand) checked 2026-10-21· Two platforms; international venue is non-custodial, US traders prohibited.
- Polymarket US Documentation — What is Polymarket US? checked 2026-10-21
- Polymarket US Documentation — Create an Account checked 2026-10-21
- Polymarket Documentation — Geographic Restrictions (geoblock) checked 2026-10-21· Machine-readable classification; three restriction tiers.
- Polymarket Help Center — Geographic Restrictions checked 2026-10-21· Article dated 2026-08-14.
- Kalshi Help Center — Can I trade on Kalshi from outside the United States? checked 2026-10-21
- Kalshi — Member Agreement (restricted jurisdictions) checked 2026-10-21· Country list lives in the agreement and changes between versions.
- Kalshi — FAQ (18+ minimum, position on state gambling law) checked 2026-10-21
- FOX5 Las Vegas — Ninth Circuit ruling and Nevada enforcement checked 2026-10-21· Published 2026-08-28.