Federally regulated exchanges can offer event contracts to eligible US residents. The rest of the picture, from state pushback to offshore venues, is genuinely contested and it moves quickly.
In the United States, prediction markets are legal to offer when they run on an exchange registered with the Commodity Futures Trading Commission as a designated contract market, or under specific staff relief. Eligible adults can trade event contracts on those venues. Several states have challenged certain contracts, especially on sports, and that question is being argued in court. Venues that are not registered, including offshore and decentralized protocols, sit in a contested space, and using them can carry legal and practical risk.
Prediction markets in the United States are treated as markets for derivatives. The contracts you trade, often called event contracts, are a yes or no claim about a future outcome, and their price reflects the market's read on how likely that outcome is. Because they are derivatives, they fall under the Commodity Exchange Act and the oversight of the Commodity Futures Trading Commission, known as the CFTC.
The clearest legal path is a designated contract market, or DCM. A DCM is an exchange that has registered with the CFTC and agreed to its rules. The CFTC first designated a venue to list this kind of contract in 2004, and the sector has grown sharply, with total volume across CFTC regulated venues exceeding 25 billion dollars in 2025 by the CFTC's own account. A registered exchange can list a new event contract by self certifying that the contract complies with the law, after which it can offer that market to verified, eligible users.
The law does set limits. Federal rules bar certain event contracts outright, including contracts that involve activity that is itself unlawful, and contracts tied to terrorism, assassination, or war. The CFTC can also determine that a category of contract is contrary to the public interest and therefore may not be listed. In 2026 the Commission proposed new rules to spell out how it would make that public interest determination, using a sequential test that asks whether a contract sits in an excluded commodity, whether it involves an enumerated activity, and whether it is contrary to the public interest. That proposal was open for public comment through 27 July 2026, so the detail of where the line falls is still being settled as of June 2026.
Federal registration does not end the conversation. Several state regulators have argued that some event contracts, particularly contracts on sporting outcomes, look like sports betting that should fall under state gaming law, and a number of states have sent cease and desist letters to operators. Platforms have generally taken the position that a federally regulated contract is governed by federal law, and the dispute is being litigated. As of June 2026 this is an open and contested question, not a settled one. The practical result is that a platform can be available to you under federal rules while a specific state continues to challenge it, so your real world access can depend on where you live and can change.
Some well known prediction markets historically operated offshore and did not accept US residents, in some cases after settlements with the CFTC. A few have since pursued US registration so they can serve US users through a regulated entity. Separately, decentralized protocols run on public blockchains and do not register with a national regulator at all. These venues can be reachable from anywhere with a crypto wallet, but that reachability is not the same as legal availability, and US persons using unregistered venues may be doing so outside the protections and the permissions that a registered exchange provides. Where a venue's status for US users is unclear, we say so rather than guess.
Two questions decide whether you can legally take part. First, is the venue itself registered or operating under recognized relief. Second, does your state accept that contract, or is it contesting it. Our platform profiles cover the first question for each venue we track, and our legality by place pages cover the second, state by state. Read both before you decide, confirm your own eligibility on the platform, and remember that being able to reach a site is not proof that it is lawful for you.
The Forecast is our plain language briefing on regulatory changes, new registrations, and shifting state positions. No tips, no picks, no hype. Subscribe to keep the legal picture current.
The federal regulator is the Commodity Futures Trading Commission, working under the Commodity Exchange Act. Its consumer facing material on prediction markets and event contracts, and its 2026 rulemaking record, are the primary sources for the federal position. State gaming regulators are the relevant authority for the state level disputes. The sources below were used in preparing this page.
A legal venue is not a safe bet. Prediction markets can and do lose people money, and a clear regulator does not change that. Trade only money you can afford to lose, never to chase a loss, and never on borrowed funds. You must be 18 or the legal age in your region. If it stops feeling like a choice, step back. In the United States you can call or text 1 800 GAMBLER or visit ncpgambling.org.