First things first – What are prediction markets?
For those asking:
what are prediction markets? They are platforms where you can sign up to buy and sell simple “yes” or “no” contracts on events tied to real-life outcomes. Unlike traditional sports betting sites, they don’t set odds on your predictions. Instead, the market (traders) has the power to determine the prices of contracts through the forces of demand and supply. This means the price of a share reflects the crowd’s collective belief about how likely an event is to happen. As more people buy the “yes” contract, the price will keep increasing and vice versa.
Kalshi and Polymarket, which are some of the biggest prediction markets in the US, cover a wide range of real-life events that you predict for a chance to claim profits. They allow you to predict outcomes tied to real-life events like politics, economics, weather, cryptocurrency prices, and much more. Having said that, here’s a table summarizing some prediction markets’ coverage and example questions:
| Market coverage |
What they mean
|
Example questions |
| Crypto price prediction |
This market allows traders to predict the future price of a specific cryptocurrency. |
Will Dogecoin be worth $2 each before the end of 2026? |
| Culture |
This allows you to predict the outcomes of music, lifestyle, fashion, etc. |
Will Davido win the Best Afrobeat Artist at the Grammy 2025 awards? |
| Economic predictions |
This allows you to predict the outcomes of specific economic events like GDP, inflation rate, and interest rates. |
Will America’s GDP grow to $40 trillion by the end of 2025? |
Are prediction markets legal in the US?
Yes, prediction markets are legal in the US, allowing traders to sign up and predict real-life outcomes through simple yes/no contracts. However, even though they are allowed to legally operate, they must be regulated by the Commodities Futures Trading Commission. As we briefly stated in the introductory paragraph, the CFTC is the federal agency that oversees derivatives and event contracts.
This means platforms like
Kalshi and Robinhood, as well as other prediction markets, must follow strict rules around market design, contracts offered, customer protections, and how trades are settled. In reality, regulation is what distinguishes legitimate prediction markets from unregulated ones. To comply with the CFTC rules, all legitimate prediction markets must verify every user they admit to their platforms. Doing this ensures that underage traders are not allowed on board.
What makes a prediction market legal?
There are so many factors that qualify a
prediction trading
site to be considered legit, aside from regulated by the CFTC. Here are some of these factors:
1. CFTC regulated
This is the first requirement that makes a prediction market legit. Being regulated by the CFTC means that their activities are being closely monitored, ensuring compliance with industry standard practices and fairness to traders.
2. Doesn’t onboard underage traders
A legit prediction market must ensure that it doesn’t onboard traders who are below 18 years of age. They do this by enforcing strict identity verification for all users. If you’ve used some of them before, you’ll notice that they won’t even allow you to make a deposit with an unverified account.
3. Transparent market rules
A legit prediction market clearly explains how each market works, how outcomes are determined, and when settlement occurs. This makes it very easy for traders to understand what they are buying into.
Getting started at a prediction market – A guide
Now that you know
what event prediction is
and its legal status, you may want to try out one of our top-rated markets. If that’s true, the following steps will be very helpful:
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Click the link to your preferred site on the banners of this page
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Provide all the required information for registration
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Complete the process by verifying your identity
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Make a deposit and head to the prediction markets
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Choose your preferred option and question
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Purchase either the “yes” or “no” contract and complete the process
Pros and cons of trading on prediction markets
Pros and cons
- Easy to understand contracts
- Requires small capital
- Available in most US states
- Markets can be very volatile
Are prediction markets legal? Our final take
In conclusion, prediction trading markets are legal in the US. This means if you’re up to 18 years old and based in the US, you can sign up on any of your preferred sites to start predicting. However, for the sake of your safety and experience, ensure to only use regulated markets like all the ones listed on the banners of this page. You can create an account on any of them in no time by clicking their registration links from the banners.
A-list sports prediction sites to try
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Prediction markets legality FAQs
🛡️ Do all markets need a CFTC license to operate?
Yes, all markets must be licensed and regulated by the Commodities Futures Trading Commission to operate in the US.
👤 Who can sign up to use a prediction market?
Only traders who are over 18 years old are allowed to sign up and trade at legitimate prediction markets.
🔍 Must I verify my identity to use a prediction market?
Yes, identity verification is compulsory on all legitimate prediction markets, especially our recommended ones.
