WHAT ARE PREDICTION MARKETS? A COMPLETE BEGINNER'S GUIDE

Are prediction markets legal in the US?

Available to eligible residents (as of October 3, 2026); check current state rules. Kalshi is a CFTC-regulated Designated Contract Market available in 47 states plus DC, and the Polymarket US app is CFTC-regulated and open to US traders in 49 states plus DC (Nevada excluded) as of 2026.

TL;DR:

Prediction markets are exchanges where you trade YES/NO contracts on real-world events — elections, Fed decisions, sports. Prices sit between $0.01 and $0.99 and reflect the crowd's live probability. In 2026, US traders use Kalshi (USD, CFTC) or the Polymarket US app (USD, CFTC-regulated).

One caveat for sports markets in 2026: federal appeals courts are split on whether states can regulate sports event contracts as gambling. The Third Circuit sided with Kalshi against New Jersey on April 6, 2026. The Ninth Circuit (Nevada, August 28, 2026) and the Sixth Circuit (Ohio and Tennessee, September 25, 2026) sided with the states. Kalshi asked the full Sixth Circuit to rehear the case on October 9, 2026; the court has not ruled. The Supreme Court has been asked to resolve the split (see Supreme Court docket 26-299), but hasn't agreed to hear it yet. Non-sports markets aren't the focus of these cases. If you want sports contracts, check the app's eligible-state list, which can change. This is general information, not legal advice. Source: Sixth Circuit opinion.

The basics

A prediction market is a marketplace where participants buy and sell contracts on the outcome of future events — elections, Fed decisions, sports results, even the weather. Each contract pays $1 if the event happens and $0 if it doesn't.

The current price of a contract is the market's consensus probability. If 'Fed cuts rates in June' trades at $0.71, the market is pricing a 71% chance of a cut.

Polymarket: deposit $10, get a $25 trading bonus with code WIN

18+ Only. Restrictions and eligibility requirements apply. Not available in all jurisdictions. Trading is risky. 100% loss can occur. See polymarket.com/tos for more information. The Polymarket US App serves as an independent software provider and affiliate of Polymarket US and Polymarket Clearing, the CFTC-regulated exchange and clearing organization.

Why they're surprisingly accurate

Pollsters and pundits don't lose money when they're wrong. Traders do. That financial incentive concentrates information faster than any single forecaster.

Decades of academic work — from the Iowa Electronic Markets to Robin Hanson's information-aggregation studies — show prediction markets routinely beat expert panels on accuracy.

The price isn't an opinion. It's the forecast.

Where to actually trade

In the US, both Kalshi and Polymarket are CFTC-licensed venues. Kalshi accepts real USD via ACH; the Polymarket US app also funds and trades in US dollars, with full ID verification. (Polymarket's international site, not for US users, uses USDC.)

Mobile-first apps like Rebet offer a social, sports-heavy entry point for US users who want a lighter on-ramp before sizing up.

• Kalshi — US, CFTC-regulated, real dollars
• Polymarket US — CFTC-regulated, US dollars
• Rebet — US, mobile-native, social & sports-first

What to expect on your first trade

Pick a market you actually have a view on. Decide YES or NO. Check the spread and your downside (you can lose the full premium). Start small — $5–$20 — until the mechanics feel natural.

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