Prediction Markets by State: Where Kalshi and Polymarket Stand in Court
Kalshi, Polymarket and others sell sports "event contracts" nationwide under federal rules. States say that is unlicensed sports betting. Here is every state fight, the rulings so far and what they mean for you.
By Giuseppe Vivarelli · Checked November 4, 2026 against two litigation trackers · Not legal advice
- Appeals courts are split: the Third Circuit sided with Kalshi (New Jersey); the Ninth (Nevada) and Sixth (Ohio, Tennessee) sided with the states.
- At least 15 states have a court case or enforcement action; Arizona and Utah have filed criminal charges.
- The Supreme Court has not taken up the question yet, so the rules can still change state by state.
The map
Tap a category to highlight it; tap a state for its full gambling guide.
State by state
Includes cases brought by the platforms or the CFTC against a state. States not listed: no case found in my sources.
- NevadaCourt sided with the stateThe Ninth Circuit ruled 3-0 that Nevada can apply its gambling law to Kalshi's sports contracts.Ruled August 28, 2026 · Kalshi asked for a rehearing
- OhioCourt sided with the stateThe Sixth Circuit ruled unanimously against Kalshi.Ruled September 25, 2026 · rehearing petition pending
- TennesseeCourt sided with the stateThe Sixth Circuit ruled against Kalshi and vacated its injunction.Ruled September 25, 2026 · rehearing petition pending
- IllinoisCourt sided with the platformA federal court partly blocked Illinois from enforcing its licensing rules against sports event contracts; Illinois has appealed.October 2026 · the CFTC sued Illinois in April 2026
- New JerseyCourt sided with the platformThe Third Circuit held that New Jersey cannot regulate Kalshi's CFTC-regulated contracts.The Supreme Court has not agreed to review the split
- ArizonaCase or enforcement pendingArizona filed criminal charges against Kalshi for unlicensed gambling; a federal judge issued a temporary block, and the CFTC sued Arizona.Charges March 2026 · CFTC suit April 2026
- ConnecticutCase or enforcement pendingKalshi and Coinbase sued state officials; injunctions pending appeal were denied.Second Circuit appeals pending (November 2026)
- IowaCase or enforcement pendingKalshi's case against Iowa officials is on appeal at the Eighth Circuit.Briefs due December 2026
- KentuckyCase or enforcement pendingThe CFTC sued Kentucky to stop enforcement against prediction markets.Filed June 23, 2026 · argument December 18, 2026
- LouisianaCase or enforcement pendingKalshi sued Louisiana officials to block enforcement.Filed October 23, 2026
- MarylandCase or enforcement pendingKalshi's case is before the Fourth Circuit; Baltimore filed the first city lawsuit against Kalshi and Polymarket.Argued May 2026, no ruling yet · Baltimore suit October 21, 2026
- MassachusettsCase or enforcement pendingRobinhood's challenge to Massachusetts officials is before the First Circuit.Argued November 4, 2026
- MissouriCase or enforcement pendingThe Attorney General sent cease-and-desist letters to six operators; Kalshi and Novig sued to block enforcement.Letters September 16, 2026 · suits October 2026
- New YorkCase or enforcement pendingThe Attorney General sued Kalshi, and the Gaming Commission is enforcing a subpoena; the CFTC sued New York.AG suit July 31, 2026 · hearing December 14, 2026
- UtahCase or enforcement pendingUtah filed a civil suit and criminal charges against Kalshi and its founders; the CFTC sued Utah.October 20–28, 2026
- TexasUnder review, no caseLawmakers held hearings on whether prediction markets are illegal sports betting; no court action found.
How we got here
- 2022
Polymarket settles with the CFTC ($1.4 million penalty) and blocks US users from its main platform.
- Dec 2025
Polymarket launches a limited, waitlist-only US app through a CFTC-regulated exchange.
- Mar–Apr 2026
Arizona files criminal charges against Kalshi; the CFTC sues Arizona, Connecticut and Illinois.
- Aug 28, 2026
Ninth Circuit rules for Nevada.
- Sep 25, 2026
Sixth Circuit rules for Ohio and Tennessee: the platforms' third straight appeals loss.
- Oct 2026
Utah files criminal charges; Baltimore sues; a federal court partly blocks Illinois.
What a prediction market is, in plain words
You buy a contract that pays $1 if an event happens ("Team A wins") and $0 if it does not. The price, say 62 cents, is the market's view of the probability. You trade against other users, not against a bookmaker, and the exchange takes a fee.
Kalshi is registered with the CFTC as a designated contract market, so it argues that only federal law applies and that it can offer sports contracts in every state, including states with no legal sports betting. States, tribes and some sports leagues say a contract on who wins a game is a sports bet and needs a state licence.
What this means for you
- Availability can change quickly after a ruling; keep withdrawable balances low.
- Prediction markets have no state responsible-gambling rules; set your own limits.
- An on-chain prediction market's main platform may still block US users. See my gambling dApps guide.
Questions
Is Kalshi legal in my state?
Kalshi is a CFTC-regulated exchange and says federal law overrides state gambling laws. Courts are split: the Third Circuit agreed for New Jersey, while the Ninth Circuit (Nevada) and the Sixth Circuit (Ohio, Tennessee) ruled that states can enforce their gambling laws against sports contracts. Check your state on the map; the answer can change with each ruling.
Is Polymarket legal in the US?
Polymarket's main platform has blocked US users since its 2022 CFTC settlement. Since December 2025 it has offered a separate, limited US app through a CFTC-regulated exchange. As of April 2026 it was seeking approval to reopen its main platform to Americans.
Are prediction market sports contracts gambling?
That is the question the courts are deciding. The platforms say the contracts are federally regulated swaps; states and tribes say they are sports betting without a state licence. Courts of appeals have split, so the Supreme Court may have to decide.
Do I pay taxes on prediction market winnings?
Yes, gains are taxable. How they are reported (as gambling winnings or as gains on financial contracts) is not settled for every product; keep records and ask a tax professional. Not tax advice.
Which states have sued Kalshi?
States with court cases or enforcement against Kalshi or other prediction markets include Nevada, Ohio, Tennessee, New Jersey, Arizona, Connecticut, Illinois, New York, Missouri, Utah, Maryland, Iowa, Louisiana, Massachusetts and Kentucky (some of these are suits filed by the platforms or the CFTC against the state).
Sources
- DeFi Rate, Prediction market lawsuit tracker (captured November 4, 2026)
- RotoWire, Prediction markets legal timeline (through October 23, 2026)
- Cointelegraph, Polymarket seeks CFTC approval for its main platform (April 29, 2026)
- Where the trackers give different dates (Illinois ruling), I give the month only.
Who wrote this and how
Editor of GamblingAppsStore, former senior iGaming analyst and affiliate marketer, based in Lugano. I track gambling law changes in all 50 states and DC.
- Published method. One formula for every operator: how I score.
- Dated sources. Every figure has a source and a check date; what I cannot verify is marked "not verified".
- Independence. Affiliate commissions never change a score; flagged operators get no affiliate link. Editorial policy.
- Corrections. Found an error? Tell me with a source and I will fix it.
21+ only (18+ where permitted). Gambling involves risk; offshore operators are not licensed by US state regulators. Free, confidential help 24/7: call or text 1-800-MY-RESET. Not legal or financial advice.