US Prediction Markets
Legal prediction market platforms like Kalshi and Polymarket connect you to federally regulated exchanges where you buy and sell yes/no contracts on the outcomes of future events in categories spanning sports, elections, politics, weather, and more.
That may sound technical, but the user experience is simple: you pick an outcome, buy “Yes” or “No” contracts, and receive $1 per contract if you’re correct and $0 if you’re wrong.
Because the Commodity Futures Trading Commission (CFTC) regulates prediction markets at the federal level, all major prediction market apps are available (nearly) nationwide.
Prediction Markets vs. Sports Betting
If you’ve used legal online sportsbooks like FanDuel and BetMGM, you already understand the underlying concept: risk money on an outcome, profit if you’re right.
Online prediction markets offer the same fundamental proposition, but they approach it from a completely different direction and operate under a distinct legal framework.
Unlike online sportsbooks, which operate under a patchwork of varying state-level regulations, prediction markets operate under federal oversight and cover far more than sports.
At an online sportsbook, you place wagers against the house. The book sets the odds and profits from the vig built into every line. If too much money comes in on one side, the book adjusts.
On a prediction market, you trade against other users. The platform operates as an exchange that matches buyers and sellers the way the stock market does. The platform profits from small trading fees, not from your losses. It has no stake in whether your prediction is right or wrong.
Side-by-Side Comparison
| Prediction Markets | Online Sportsbooks | |
| Who’s on the other side | Other traders (peer-to-peer exchange) | The sportsbook (house model) |
| Pricing format | Contract prices from $0.01 to $0.99 | Sports betting odds (-110, +120, etc.) |
| Cost of trading | Bid-ask spread + platform fees | Vig (juice) embedded in the odds |
| Markets covered | Sports, politics, economics, weather, and more | Sports only |
| Sports market depth | Primarily games outcomes; championships; limited parlays | Extremely granular betting options; 100+ player props per game; extensive parlays |
| Cashing out early | Sell your contracts anytime at current market price | Cashout at the sportsbook’s offered price (when available) |
| Regulatory oversight | CFTC (federal financial regulator) | State gaming commissions |
| Availability | Nationwide (sports + politics unavailable in some states) | Nearly 40 states (availability varies by operator, subject to state gambling licensure) |
How Pricing Works: Contract Prices vs. Odds
Sportsbook odds tell you two things: the implied probability and your potential payout. For example, bets priced at odds of -150 imply roughly 60% probability and pay $100 profit on a $150 wager ($250 total payout).
Prediction market prices communicate the same information more directly. A “Yes” contract trading at $0.60 implies the market collectively believes there’s about a 60% chance the event will happen. If you spend $150 on contracts at $0.60 each, you’d get 250 contracts. If you’re right, you receive $1.00 per contract ($250) for a net profit of $100 before fees.
Translating between the two formats is not intuitive for most people:
- $0.60 contract price ≈ -150 American odds (60% implied probability)
- $0.25 contract price ≈ +300 American odds (25% implied probability)
- $0.80 contract price ≈ -400 American odds (80% implied probability)
One advantage of the contract price format is that it makes risk and reward immediately obvious. You can see exactly what you’re paying, what you’ll receive if you’re right, and what you’ll lose if you’re wrong.
The Cost of Trading vs. the Vigorish
At an online sportsbook, the cost is invisible. A standard -110/-110 line embeds about 4.5% vig. You don’t see a “fee” line item, but you pay it through worse odds than a fair market would offer.
On a prediction market, the costs are visible but come from multiple sources:
- The spread: The gap between what buyers are bidding and what sellers are asking. In a liquid market (major elections, big sporting events), the spread might be $0.01-$0.02. In a thin market, it could be $0.05-$0.10 or more.
- Platform fees: Platform fees vary by operator. Some prediction market sites charge formula-based fees. Others may charge a flat rate, often in the range of $0.01 to $0.02 per contract bought and sold (no closing fees if you hold until the event concludes).
Example: Comparing a Prediction Market to a Sports Wager
Suppose you want to take a position on the Texans winning their next game, and you estimate that the true probability that they’ll win is 60%.
- At a sportsbook: You might see Texans -155 (implying 60.8%). A $155 bet profits $100 if the Texans win. The vig costs you roughly $3.50 in expected value terms.
- On a prediction market app: You buy “Yes” at $0.61 (including a $0.01 spread cost). 155 contracts cost you $94.55. If the Texans win, you receive $155 and profit $60.45 minus fees. With a $0.02-per-contract fee structure, your fees total $3.10.
The all-in costs end up in a similar range for liquid markets. Where prediction markets tend to be cheaper is in less liquid sports-related markets (player props, niche futures), where sportsbooks embed higher vig. Where sportsbooks can be cheaper is in high-volume lines (NFL spreads, MLB moneylines) with tight, competitive odds.
The Availability Advantage
Online sports betting is regulated at the state level exclusively. Most states have legalized online sports betting to some degree, but millions of Americans are still without access to regulated sportsbooks.
Additionally, the state-level patchwork of regulations and licensing conditions means that the major sportsbook brands (BetRivers, Bet365, etc.) are only available in some of the states that have legalized online sports betting.
In contrast, prediction markets operate nationwide under federal CFTC regulations. Some states have challenged the legality of prediction markets based on sporting events and politics, but favorable court rulings have kept prediction markets available in nearly every state.
A handful of states have secured limited restrictions on specific contract types, which we’ll discuss in more detail below.
For readers in states without legal sports betting, prediction markets represent the only regulated way to trade on sports outcomes.
Market Variety
Online sportsbooks offer odds on sports (almost) exclusively. Some sportsbooks may occasionally offer wagers on entertainment events like the Oscars and Emmys, but only in select states and rarely even then. For the most part, legal online sportsbooks stick to sports.
Prediction markets treat every verifiable future event as a potential market. You can trade on Federal Reserve interest rate decisions, whether a hurricane will make landfall, inflation data, Supreme Court confirmations, earnings reports, temperature records, and more. Sports are one category among many.
For traders with expertise in economics, politics, weather, or other domains, prediction markets provide a regulated way to put that knowledge to use.
How Legal Prediction Markets Work
Every trade on a prediction market involves buying or selling an event contract. The mechanics are simple once you see them in action.
The Basics of Event Contracts
Each market poses a question with a verifiable outcome. For every question, there are two sides: “Yes” (the event will happen) and “No” (the event won’t happen).
- Contracts trade at prices between $0.01 and $0.99.
- If the event happens, “Yes” contracts settle at $1.00 and “No” contracts settle at $0.00.
- If the event doesn’t happen, the reverse: “No” pays $1.00 and “Yes” pays $0.00.
The contract price reflects the market’s collective estimate of probability. A “Yes” contract at $0.70 roughly means the crowd believes there’s roughly a 70% chance the event will happen.
You don’t need to hold until settlement. Unlike a traditional sportsbook bet, you can sell your contracts to other traders at any point before the event resolves. This means you can lock in your profits if the price moves in your favor or cut your losses if it moves against you.
Example 1: Trading A Sports Event Contract
You believe the Philadelphia Eagles will win their Week 1 game, and the market is underpricing them. The “Yes” contract is trading at $0.45.
- Your trade: You buy 100 “Yes” contracts at $0.45 each.
- Your cost: $45.00
- Outcome A (Eagles win): Your 100 contracts settle at $1.00 each. You receive $100.00. Net profit: $55.00 (minus fees).
- Scenario B (Eagles lose): Your 100 contracts settle at $0.00. You lose your $45.00.
Your maximum risk is what you paid. You cannot lose more than $45 on this trade.
Example 2: Hedging with Prediction Markets
You own a small landscaping business in Houston. Hurricane season is approaching, and a major storm would cost you several weeks of revenue. You want financial protection without buying a full insurance policy.
A prediction market lists the question: “Will a Category 2+ hurricane make landfall on the Texas Gulf Coast before November 1?” The “Yes” contract is trading at $0.15.
- Your trade: You buy 2,000 “Yes” contracts at $0.15 each.
- Your cost: $300.00
- Scenario A (a major hurricane hits):** Your contracts settle at $1.00 each. You receive $2,000. Net profit: $1,700 (minus fees). This partially offsets your lost business revenue.
- Scenario B (no major hurricane): Your contracts settle at $0.00. You lose $300, but your business operates normally and generates its full seasonal revenue.
The $300 you spent on contracts functions as an insurance premium. You’re paying a known, limited cost to protect against a specific financial risk.
Placing Orders On Prediction Markets
Most prediction market apps offer two order types:
- Market order: Buy or sell immediately at the best available price. Fast execution, but you accept whatever price is currently offered.
- Limit order: Set your preferred price and wait. You get a better price if your order fills, but there’s no guarantee it will.
For beginners, market orders in liquid markets (popular elections, major sports events) are the simplest way to get started. Limit orders become valuable as you gain experience and want more control over entry prices.
Where to Trade: US Prediction Market Apps
Several CFTC-regulated platforms operate in the United States. Each targets a different type of trader and offers a different experience.
| Platform | Best For | Interface Style | Fees |
| Kalshi | Market diversity; experienced traders | Full order book with advanced tools | Formula-based (varies by price); generally low fees |
| OG.com | Sports-focused traders wanting simplicity | Browse-and-tap; prices displayed as betting odds (most sportsbook-like) | $0.02 per contract bought/sold |
| Polymarket | High-volume politics, sports, geopolitical, and cultural events | Streamlined; user-friendly; | Formula-based (varies by price); generally low fees |
| Robinhood | Low fees; existing Robinhood brokerage users | Standard brokerage app | $0.01 per contract bought/sold |
| PredictIt | Political markets; granular election markets | Basic web interface | 10% on profits + 5% on withdrawals |
Kalshi
Kalshi is the largest standalone prediction market platform in the US and a CFTC-registered Designated Contract Market (DCM). It offers the widest range of market categories: sports, politics, economics, weather, science, and more.
The interface is built for active traders. You can view full order books, set limit orders, and track positions across multiple markets simultaneously. If you’re the type of sports bettor who shops lines across multiple books and tracks your ROI in a spreadsheet, Kalshi’s depth and tooling will feel natural. If you prefer a simpler tap-and-trade experience, expect a learning curve.
The fee structure uses a formula that varies based on contract price and trade size. Fees tend to be competitive for larger trades but can eat into small positions. Kalshi publishes its fee schedule on its website.
OG.com
OG.com’s app is the closest thing to a sportsbook interface among prediction markets. The OG.com app focuses primarily on sports markets, presents contracts in a browse-and-tap format, and doesn’t require you to interact with an order book. If you’re used to BetMGM or FanDuel, OG.com’s layout will feel immediately familiar.
The $0.02-per-contract fee structure is transparent and easy to calculate, which is a welcome change from the formula-based fees on other platforms.
OG.com’s biggest downside is less market variety. OG.com covers sports, politics, and economics but doesn’t match Kalshi’s breadth in weather, science, and niche categories.
Polymarket
Polymarket built its reputation on high-volume political markets and has since expanded into sports, crypto, and pop culture.
The Polymarket app charges a formula-based fee designed to encourage liquidity (buyers/sellers) at the extreme ends of contract prices. In other words, you’ll pay the most for contracts priced at around $0.50 and the least for contracts priced closer to $0.01 or $0.99.
That said, Polymarket’s fees tend to be lower than most other apps on average. Total fees for 100 contracts range from $0.05 to $1.25.
Polymarket’s liquidity tends to be concentrated in its most popular markets. When a market is active, spreads are tight, and execution is fast. In less popular markets, liquidity can be thin.
Robinhood Prediction Markets
Robinhood offers prediction markets through a partnership with Kalshi, accessible within the same app millions of Americans already use for stock trading. The fee structure is the simplest in the market: $0.01 per contract, whether you’re buying or selling.
For anyone who already has a Robinhood account, the barrier to entry is essentially zero. You can fund trades from the same balance you use for stocks and ETFs. The market selection mirrors Kalshi’s, since Robinhood sources its contracts from Kalshi.
The experience is streamlined relative to Kalshi’s native platform, with less complexity for beginners but also fewer advanced features (limited order book visibility, for example).
PredictIt
PredictIt is the longest-running US prediction market and remains focused almost exclusively on politics. It operates under a CFTC no-action letter and caters to traders who want granular markets on elections, legislative outcomes, and policy decisions.
The fee structure is the most expensive in the industry: 10% of profits on winning trades and 5% of all withdrawals. These fees significantly reduce your effective returns, particularly on smaller trades. PredictIt’s advantage is its depth of political markets that other platforms may not list.
What You Can Trade on Prediction Markets
Prediction markets cover far more than sports. Their breadth is one of their primary advantages over sportsbooks, which are limited to athletic events and a handful of entertainment props.
Sports Prediction Markets
Game outcomes, championship futures, player props, and season awards. They’re functionally similar to what sportsbooks offer, except you’re trading contracts on an exchange rather than placing bets with a book. Sports markets are available (nearly) nationwide on prediction market platforms, including in states without legal sports betting.
Political Prediction Markets
Elections (presidential, congressional, gubernatorial), legislative outcomes (will a bill pass?), policy decisions, cabinet confirmations, and approval ratings. Political markets are among the most liquid on any platform.
Economics and Finance
Federal Reserve interest rate decisions, monthly inflation data (CPI), unemployment figures, GDP growth, and corporate earnings. These markets are particularly useful for hedging. If rising interest rates would hurt your mortgage or business, you can buy “Yes” contracts on a rate hike to partially offset that risk.
Weather Prediction Markets
Hurricane landfalls, temperature records, snowfall totals, and seasonal forecasts. Weather markets function as accessible parametric insurance: you can protect yourself financially against specific weather events without a traditional insurance policy.
Entertainment and Pop Culture
Oscar winners, box office results, TV show outcomes, music releases, and celebrity events. These markets tend to be lower-volume but are consistently available on the most popular prediction market sites.
Science and Technology
Product launches, AI milestones, space exploration events, and scientific achievements. A growing category as platforms expand beyond traditional market types.
Researching Your Trades
*Note: Nothing in this section should be interpreted as trading advice. These are general observations about how traders approach research in different market categories.*
Successful prediction market traders tend to rely on primary data sources rather than pundit opinions or social media sentiment. The specific sources that matter depend on what you’re trading.
- Sports: Official league injury reports, team and player statistics from league websites (NFL.com, NBA.com, MLB.com), historical matchup data, and weather forecasts for outdoor events. If you already track this information for sportsbook purposes, the same research applies directly to prediction market contracts.
- Politics: Polling aggregators (FiveThirtyEight, RealClearPolitics, The Silver Bulletin), early voting data from state election offices, campaign finance filings from the FEC, and historical voting patterns by district or state. Political markets tend to move on polling releases and major news events.
- Economics: The Bureau of Labor Statistics (BLS) publishes CPI, unemployment, and jobs data on a fixed monthly schedule. The Federal Reserve publishes meeting minutes and rate decisions on announced dates. The Bureau of Economic Analysis (BEA) reports GDP. Knowing the release calendar gives you a structural advantage, since prices often move sharply at the moment data drops.
- Weather: NOAA forecasts, the National Hurricane Center’s advisory updates, and specific weather station data (which prediction market settlement rules often reference directly). For hurricane and temperature markets, understanding which official data source the market uses for resolution is critical.
The common thread across all categories is straightforward: traders who consult the same data sources that prediction markets use for settlement tend to make better-informed decisions than those trading on instinct or headlines.
Relying on official data sources may seem obvious, but most users struggle to contain their emotions and avoid the hype cycle that dominates news reporting and social media conversations.
Are Prediction Markets Legal in the US?
Yes. Broadly speaking, if you can access a prediction market platform, complete identity verification, and deposit funds, you can trade. Platforms that operate in your state will let you sign up. Platforms restricted in your state will block access during registration.
The underlying legal situation is more nuanced. Prediction markets operate as CFTC-registered Designated Contract Markets (DCMs), classified as financial exchanges rather than gambling operations. The CFTC’s position is that the Commodity Exchange Act preempts state gambling statutes for event contracts traded on its licensed exchanges.
Some states disagree. Regulators in Nevada, Massachusetts, New Jersey, and several other states have argued that sports-related event contracts are functionally identical to sports wagering and should fall under their gambling laws. The disagreement has produced lawsuits in both directions: states suing platforms, and platforms suing states.
The most significant ruling to date came in April 2026, when the US Court of Appeals for the Third Circuit affirmed a preliminary injunction in Kalshi v. New Jersey Division of Gaming Enforcement, ruling that the Commodity Exchange Act likely preempts state gambling laws for contracts traded on CFTC-licensed markets.
Separate appeals are working through the Ninth Circuit (Nevada) and Fourth Circuit (Maryland). Whether the Supreme Court ultimately weighs in depends on how those circuits rule, though a split among the circuits would make review more likely.
For traders, the practical takeaway is this: prediction markets remain accessible nearly nationwide. A small number of states have secured restrictions on specific contract types (primarily sports and politics-related contracts).
Prediction Market Bonuses and Promotions
Prediction market welcome offers are generally smaller in scale than online sportsbook bonuses. Most operators focus on sign-up incentives rather than the complex multi-step bonus structures common in online sports betting.
If your primary interest is claiming bonuses with headlines like “get up to $1,000 back,” prediction market apps will disappoint. If your primary interest is trading on an open exchange (not betting against the house), then prediction market bonuses will serve their purpose: a little something extra as a “thank you” for signing up.
Common types of prediction market bonuses include:
- Sign-up credits: A small amount of free trading capital (typically $5-$25) is deposited into your account upon completing registration. Usually comes with minimal restrictions.
- First-trade matches: The platform matches your first trade or deposit up to a specified amount. Less common than sign-up credits but more valuable when available.
- Referral bonuses: A small credit for both you and the person you refer when they create an account and make their first trade.
Getting Started: Your First Trade
If you’ve signed up for a sportsbook before, the prediction market onboarding process will feel familiar, with a few differences.
Step 1: Choose a Platform
Your choice depends on what you want to trade, whether you prioritize fees or ease of use, and if you want a sportsbook-like experience (simple) or a more complex stock-market-like interface with full order book access.
See the prediction markets comparison table above for help identifying the best app for your needs.
Step 2: Create An Account and Verify Your Identity
You’ll provide standard registration details: name, email, date of birth, address, and Social Security number. Federal Know Your Customer (KYC) regulations require identity verification for financial services, so expect to upload a photo ID and potentially a selfie or proof of address.
Verification can take anywhere from a few minutes (automated approval) to a few days (manual review). In our experience, identity verification has always occurred immediately after hitting the “submit” button.
If verification takes longer than expected, the most common reasons are blurry document photos, a name mismatch between your ID and the information you entered, or an address that doesn’t match public records.
Step 3: Deposit Funds
Deposit methods vary by operator. Most prediction market apps accept bank transfers (ACH) and debit cards. Some accept wire transfers, services like Apple Pay, and even crypto.
Minimum deposits are generally low ($5-$20 on most platforms). Unlike online sportsbooks, prediction markets don’t typically offer large deposit match bonuses that incentivize big initial deposits. Start small while you learn the interface.
Step 4: Find a Market and Place Your First Trade
Browse available markets by category (sports, politics, economics, etc.) or search for a specific event. When you find a market that interests you, you’ll see the current prices for “Yes” and “No” contracts.
Example: You see a market asking, “Will the Yankees win tonight’s game?” The “Yes” contract is trading at $0.55. You believe the Yankees will win, so you buy 20 “Yes” contracts.
- Your cost: 20 × $0.55 = $11.00 (plus fees)
- If the Yankees win: Your contracts settle at $1.00 each. You receive $20.00. Your profit is $9.00 minus fees.
- If the Yankees lose: Your contracts settle at $0.00. You lose your $11.00.
On most prediction market apps, placing this trade takes two taps: select “Yes,” enter the number of contracts you want, and confirm.
Step 5: Monitor and Manage
Your open positions appear in your portfolio or account dashboard. Contract prices are updated in real time as other traders buy and sell.
You have three options for any open position:
- Hold to settlement: Wait for the event to resolve. If you’re right, the platform credits your account automatically. No action needed.
- Sell early for a profit: If the “Yes” price has risen since you bought (say, from $0.55 to $0.75), you can sell your contracts at the new price and pocket the difference without waiting for settlement.
- Sell early to cut your losses: If the price has dropped (e.g., from $0.55 to $0.30), you can sell and take a smaller loss rather than risking total loss at settlement.
Flexibility is one of the key advantages prediction markets have over online sportsbooks, which generally lock you in until the event concludes (unless early cashout is offered at the book’s discretion and price).
Common Prediction Market Mistakes
Experience with online sports betting translates well to prediction markets, but some habits and assumptions can cost you. Here are the most common pitfalls for newcomers.
Ignoring the Spread in Thin Markets
Liquid markets (major elections, championship games) have tight spreads of $0.01-$0.02. Niche markets can have spreads of $0.05-$0.10 or wider. If you buy at $0.55 and the only available exit is selling at $0.48, you’ve lost $0.07 per contract before the event even resolves.
The fix: check the bid-ask spread before entering a trade. If the spread is wide relative to your expected profit, either use a limit order to get a better entry price or skip the market entirely.
Not Reading the Settlement Rules
Every market specifies exactly how it determines the outcome: which data source, what time, what counts as a “yes.” A market about “the high temperature in Miami” might reference a specific NOAA weather station, not the Weather Channel or your phone. A “Will Player X score 25+ points?” market specifies whether overtime counts.
Misunderstanding the rules won’t invalidate your trade. Settlement follows the rules as written, regardless of what you thought you were trading on.
Forgetting About Fees
Platform fees reduce your effective return on every trade. A $0.02-per-contract fee doesn’t sound like much, but on a $0.60 contract that settles at $1.00, that fee represents 5% of your profit.
Always factor fees into your expected profit before entering a trade. Some trades that appear profitable at first become marginal or negative after accounting for fees.
Assuming Contract Prices Are Genuine Probabilities
A contract at $0.60 roughly implies a 60% probability, but the price can be distorted by low liquidity, hedging activity, platform fees, and irrational market sentiment. Prices in illiquid markets are particularly unreliable as probability indicators because a single large order can move the price significantly.
Treat contract prices as a useful signal, not gospel. Your own research and analysis should inform your trades, not just the current market price.