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Prediction markets are legal under federal oversight but contested state by state. Kalshi and Polymarket US trade event contracts under the CFTC, while a growing number of states and appeals courts say sports contracts are betting that falls under state law. For affiliates the practical answer is local: the user’s state decides what you can promote. Blask data shows US demand sits with two brands, the category more than doubled in a year, and the fastest growth is in states that are also in court.
This guide was written by the AffRoom team using data from Blask, an AI-driven iGaming analytics platform that tracks brand and category interest in the US market. All brand and state figures below come from a Blask export dated Oct 1, 2026; the legal information comes from publicly available sources linked in the text.
AffRoom is a gambling and affiliate hub for professionals building, scaling and monetizing iGaming brands.
Key takeaways
- Courts are split. The Third Circuit backed federal preemption (Apr 6, 2026); the Ninth (Aug 28) and the Sixth (Sep 25) said states can regulate sports contracts. New Jersey has asked the Supreme Court to settle it.
- Two brands own the demand. Polymarket and Kalshi hold 97% of the combined Blask Index (71.5% and 25.6%) of the ten largest US prediction-market brands, Oct 2025 to Aug 2026. Every other brand, including FanDuel, DraftKings and Robinhood, is below 1%.
- The gap is closing. Polymarket led Kalshi 4.5x in May 2026 and 1.6x in August.
- The category grew 2.35x (26,650 in Oct 2025 to 62,660 in Aug 2026) and peaked at 77,910 in April.
- Fastest growth: Arizona (4.1x), Oregon (4.0x), Minnesota (3.3x), Michigan and North Carolina (3.2x each). Volume leaders: California, New York, Texas, Florida.
What Are Prediction Markets and How Do They Work?
Prediction markets are exchanges where traders buy and sell prediction contracts on the outcome of a future event: an election, a game, an inflation print. Each contract is a yes/no question that pays $1 per share if the outcome happens and $0 if it does not. The share price, from 1 to 99 cents, is the market’s implied probability, so a 62-cent Yes share means the crowd sees roughly 62% odds. That makes the price closer to a real-world forecast than to a wager against the house: traders profit by buying below the final payout, while the exchange earns fees and relies on market makers for liquidity, much as stock markets do. Where market depth is thin, prices swing more, so trading volume matters as much as the headline probability.
Kalshi’s active markets in 2026 cover sports, elections, economic data and entertainment, plus “mention” markets on what a public figure will say. The CFTC issued an advisory on mention markets on Sep 22, 2026 (Rotowire). Markets like these raise obvious questions about insider trading and market manipulation, because a trader may have advance knowledge of what a speaker will say.
Are Prediction Markets Legal in the US in 2026?
Federally, yes, with conditions. The Commodity Futures Trading Commission (CFTC) regulates event contracts traded on designated contract markets. Kalshi is one; Polymarket US runs through a CFTC-regulated exchange it acquired, QCEX. In 2024 that exchange won a federal court case against the agency over election contracts, and on Jun 11, 2026 the CFTC’s new proposal set out contract-by-contract review: most sports contracts allowed, contracts on player injuries, assassinations and terrorist acts banned (Rotowire). The proposal is not final. A federal regulator normally publishes a notice of proposed rulemaking, takes public comment and only then issues a final rule, so the existing framework governing these types of contracts stays in place for now.
At state level, it depends. The fight is over regulatory jurisdiction: states argue that sports contracts are sports betting and need a state licence, while the platforms and the CFTC argue that federal law preempts that. Courts have not agreed with each other:
| Date | Court | Ruling |
|---|---|---|
| Sep 25, 2026 | Sixth Circuit (Ohio, Tennessee) | Sports contracts on the exchange are not “swaps”, so state gaming rules apply (CoinDesk) |
| Aug 28, 2026 | Ninth Circuit | States can regulate sports contracts, contradicting the Third Circuit (Rotowire) |
| Jul 28, 2026 | US District Court, Minnesota | Blocked enforcement of Minnesota’s ban, due to start Aug 1, while the case continues (The Block) |
| Apr 6, 2026 | Third Circuit | Federal law preempts state gaming law for contracts tied to sports on CFTC-registered exchanges (Rotowire) |
As of Oct 5, 2026, Fox Sports lists Nevada, Massachusetts, Michigan and Washington as states where court orders or enforcement limit the major online platforms. Arizona, California, Connecticut, Illinois, Maryland, Minnesota, New Mexico, New York, Ohio, Rhode Island, Tennessee, Texas, Utah and Wisconsin are listed as contested, with active lawsuits or an enforcement action. Trackers differ at the edges (Rotowire reports a Kentucky lawsuit, Fox Sports lists Kentucky as available), so check each platform’s own state list before sending traffic. Sports contracts are the usual target; other markets are rarely challenged.
This is a summary of public reporting, not legal advice. Regulated markets at federal level are not the same thing as state-licensed ones.
Prediction Markets News: Latest Developments
Regulatory developments move quickly, and each filing can change which states are open to the major platforms. The latest items:
- Sep 24: New York’s attorney general sued Polymarket (the state sued Kalshi on Jul 31); the company moved the case to federal court and countersued (Rotowire).
- Sep 2: New Jersey filed a Supreme Court petition in Flaherty v. KalshiEX to resolve the Third vs Ninth Circuit split.
- May 2026: Polymarket began rolling out its US app to waitlisted iOS users (Yogonet).
Kalshi vs Polymarket: What Is the Difference?
The two leading prediction market platforms differ mainly in regulatory route, who can use them and how they settle:
| Kalshi | Polymarket US | Polymarket international | |
|---|---|---|---|
| Regulatory route | CFTC-designated contract market | CFTC-regulated exchange (QCEX) | Not regulated for US use |
| Who can use it | US users, subject to state limits | US users with ID verification (KYC), app-first | Geoblocks US IP addresses |
| Settlement | USD | USD | USDC (crypto) |
Americans could not use Polymarket until its US product launched, and the international site, a blockchain-based platform settled in the USDC cryptocurrency, still blocks them. Details on the US product come from Polymarket Review, a third-party guide; confirm against the platform before publishing offers.
Who Wins US Demand: Blask Data on Prediction Market Brands
We use Blask data, the analytics provider behind our US casino brand ranking. The table shows each brand’s share of the combined Blask Index of the ten largest US prediction market brands, Oct 2025 to Aug 2026 (11 full months).
| Brand | Share of top-10 index |
|---|---|
| Polymarket | 71.5% |
| Kalshi | 25.6% |
| Myriad | 0.9% |
| Manifold | 0.7% |
| Novig, PredictIt, Robinhood, FanDuel, DraftKings, ProphetX | 0.1% to 0.3% each |
Together the top two take 97.1%. The incoming betting giants are not visible yet: FanDuel, DraftKings and Robinhood sit at 0.1% to 0.3% each (FanDuel and DraftKings data starts in Dec 2025), so traditional sportsbooks and brokers are still minor players in prediction market contracts. For a closer look at those operators, see our FanDuel Casino review and DraftKings Casino review.
Polymarket led Kalshi 2.8x over the period, but the lead has shrunk. In the monthly table, the leader is Polymarket and the challenger is Kalshi:
| Month | Leader share | Challenger share | Lead multiple (x) |
|---|---|---|---|
| May 2026 | 79.8% | 17.8% | 4.5x |
| Jun 2026 | 68.9% | 28.7% | 2.4x |
| Jul 2026 | 61.5% | 36.3% | 1.7x |
| Aug 2026 | 58.0% | 36.0% | 1.6x |
| Sep 2026 (preliminary) | 58.8% | 30.9% | 1.9x |
Why does the leader, with restricted US access, still draw nearly three times the interest of its rival over the year? The index measures interest in a brand, not verified US customers. The name is better known, while its US product is a separate app behind ID checks. Read the index as awareness among retail traders, not as an audience you can convert.
Brand and category indices are separate measures. Both brands fell in August while the category rose, so do not compare them on one scale.
How Fast Is the Category Growing, and Where?
The Blask category index rose from 26,650 in Oct 2025 to 62,660 in Aug 2026, up 2.35x. It hit a record 77,910 in April (2.9x October), fell to 43,630 in June and recovered. Blask data alone does not explain the spring peak; a sports-calendar effect is plausible because sports prediction demand follows the season, so plan for seasonality.
| Month | Category index (US) |
|---|---|
| Oct 2025 | 26,650 |
| Dec 2025 | 42,980 |
| Mar 2026 | 69,020 |
| Apr 2026 | 77,910 |
| Jun 2026 | 43,630 |
| Aug 2026 | 62,660 |
September is excluded: the figure is preliminary and some states, including California, have no data yet. The index also does not split the category into market categories such as sports, politics or economics.
Biggest states. California, New York, Texas and Florida make up 34.3% of the August total.
| State | Oct 2025 | Aug 2026 | Share of Aug US index | Change |
|---|---|---|---|---|
| California | 4,400 | 8,100 | 12.9% | 1.8x |
| New York | 3,600 | 5,400 | 8.6% | 1.5x |
| Texas | 1,600 | 4,400 | 7.0% | 2.8x |
| Florida | 1,300 | 3,600 | 5.7% | 2.8x |
Fastest-growing states. Among states with an October 2025 index of at least 390:
| State | Oct 2025 | Aug 2026 | Change |
|---|---|---|---|
| Arizona | 390 | 1,600 | 4.1x |
| Oregon | 480 | 1,900 | 4.0x |
| Minnesota | 390 | 1,300 | 3.3x |
| Michigan | 590 | 1,900 | 3.2x |
| North Carolina | 590 | 1,900 | 3.2x |
Smaller bases grew faster (Wisconsin 5.0x from 260, North Dakota 8.5x from 20), but the volumes are too small to plan around. Blask rounds state values to steps, so multiples are approximate.
FAQ
What are prediction markets and how do they work?
They are exchanges where users trade yes/no contracts on future events. Each share pays $1 if the event happens and $0 if not, and its price (1 to 99 cents) shows the market’s implied probability. Traders make money by buying below the payout and being right.
Are prediction markets legal in the USA?
Federally they are regulated by the CFTC, and the two leading exchanges operate under that framework. At state level the answer varies: courts disagree, and several states are suing or enforcing against sports contracts. New Jersey has asked the Supreme Court to resolve the split.
What is the difference between Kalshi and Polymarket?
Kalshi is a federally designated exchange settled in USD. Polymarket has an international crypto platform that blocks US users and a separate US app, run through a federally regulated exchange and requiring ID verification. In Blask data the two hold 71.5% and 25.6% of interest, but the gap has been closing since May.
Can US residents use Polymarket?
Yes, through its US app, not the international site, which geoblocks US IP addresses. The US app is app-first, requires ID verification, and began rolling out to waitlisted iOS users in May 2026. Some states restrict access.
Can You Bet on Prediction Markets in Every State?
No. As of Oct 5, 2026, Fox Sports lists Nevada, Massachusetts, Michigan and Washington as having court orders or enforcement limiting access, and about fourteen more states as contested, including New York, California, Texas, Arizona and Ohio. Lists change weekly and differ between trackers, so verify on the platform before promoting.
Are prediction markets gambling?
It is legally unsettled. The platforms and the agency treat event contracts as federally regulated derivatives; states and the Sixth Circuit say sports contracts are not swaps and fall under state gaming law. Until the Supreme Court or lawmakers set clearer rules, both positions are live. For licensing background, see licence types and legal age requirements.
Conclusion
The US market is two brands, one fast-growing category and a legal map that changes by state and by month. Use Blask’s numbers to pick where demand is, then use the court and state lists to decide where you can send traffic. Treat any picture as provisional: a final rule, a Supreme Court decision or a new state-level guardrail can redraw it, and a bet on the wrong state costs more than a bet on the wrong brand.
Looking for offers to test in the US? AffRoom’s offers base and casino affiliate programs directory are the place to start, and our Blask-based US casino ranking shows the licensed side of the same market.
