Where do prediction markets stand legally?

Prediction markets are moving from the fringe into the ￰0￱ have been satirized on South Park , made founders wealthy through venture funding, and even triggered controversy after a Nobel Prize ￰1￱ two leaders in the space are Kalshi, a regulated ￰2￱ that settles contracts in dollars, and Polymarket, a decentralized crypto -based platform built on ￰3￱ they saw record trading volume of $1.44 billion in September, with Kalshi pulling ahead at 60% ￰4￱ 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 ￰5￱ 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 ￰6￱ buy and sell contracts based on the outcome of real-world ￰7￱ prices shift dynamically with collective belief, and every trade is an incentive-driven bet on the ￰8￱ instance, take a market for “Will Team A win football match?” On the platform, each event works like a tug-of-war between two sides — YES and NO — whose combined value always equals $1. If you believe Team A will win, you buy the YES contract; if you believe the opposite, you pick ￰9￱ traders react to new data, rumors, or intuition, the prices shift in real time.

So, if a contract is trading at $0.80, it indicates that the market thinks the event has an 80% chance of ￰10￱ earn a $1 payout for your stake if your prediction comes ￰11￱ prediction markets are off-chain, centralized, and regulated like ￰12￱ are decentralized and run on blockchain, like Polymarket , giving them more flexibility but less regulatory ￰13￱ why do they matter? Because prediction markets aggregate new information, even outpacing traditional ￰14￱ money on the line, guesses become predictions with more accurate ￰15￱ many cases, these markets end up charting the future before anyone else ￰16￱ their similarity to gambling or speculative betting has made regulation tricky across ￰17￱ different jurisdictions treat prediction markets United States The regulatory treatment of prediction markets in the ￰18￱ on the platform’s operational model and ￰19￱ and Polymarket showcase how differently regulators treat these platforms.

Kalshi, fully regulated under the CFTC as a Designated Contract Market, is allowed to offer legal event contracts across various topics under federal oversight. meanwhile, its decentralized rival Polymarket has a bitter history with the ￰20￱ was fined $1.4 million in 2022 for allegedly offering illicit binary options contracts, forcing it to withdraw from ￰21￱ 2025, it reentered the market after acquiring QCEX, a CFTC-licensed derivatives ￰22￱ contrast between these rivals underscores the country’s regulatory stance: innovation is welcomed but only if it plays by the ￰23￱ Kingdom and European Union Most EU countries treat prediction markets primarily as gambling grounds and have a fragmented regulatory approach.

Meanwhile, the United Kingdom permits limited forms of prediction markets (Betfair-style betting exchanges) under the oversight of the UK Gambling Commission alongside stringent consumer protection ￰24￱ legal grey zone, created by the regulatory ambiguity, limits institutional participation and the overall growth of these markets. Consequently, the UK and other EU countries like Belgium, France, and Poland have restricted the operations of prediction markets such as Polymarket, Kalshi, and others, citing violations of gambling regulations and international ￰25￱ Countries Asia-Pacific countries tend to take a restrictive stance on prediction markets, often classifying them as gambling ￰26￱ operations are rare or nearly impossible, and jurisdictions such as Singapore, Taiwan, Thailand, and Australia have mulled a ban on betting platforms Polymarket and ￰27￱ experts argue that prediction markets should be seen as data infrastructures rather than merely speculative ￰28￱ the parallel side, regulation either forces platforms into centralized models or drives them completely offshore, limiting wider ￰29￱ coming years, and how regulators choose to classify them, will decide whether prediction markets remain niche tools or evolve into mainstream financial infrastructure.