Where do prediction markets stand legally?
Prediction markets are moving from the fringe into the mainstream. They have been satirized on South Park , made founders wealthy through venture funding, and even triggered controversy after a Nobel Prize leak. The two leaders in the space are Kalshi, a regulated U.S. exchange that settles contracts in dollars, and Polymarket, a decentralized crypto-based platform built on Polygon. Together they saw record trading volume of $1.44 billion in September, with Kalshi pulling ahead at 60% share. As their visibility grows, the spotlight is turning to a key issue: are prediction markets legal, and where? To understand the legal debate, it’s worth first breaking down how prediction markets work. What are prediction markets? Simply put, a prediction market is a marketplace for bets on future events such as election outcomes, sports, weather patterns, or financial trends. People buy and sell contracts based on the outcome of real-world events. The prices shift dynamically ...