Nevada, Massachusetts, Maryland, and Ohio have all moved against prediction markets. Tennessee ruled the opposite way, in Kalshi's favor. Arizona filed criminal charges against Kalshi on March 18, 2026. If you're trying to figure out whether prediction markets are legal in your state, the honest answer is: it depends on which state, which platform, and which week you're asking.
This is the messiest part of the prediction markets story right now. Kalshi argues it's a federally regulated derivatives exchange that doesn't need permission from any state — a position the CFTC's own chairman, Caroline Pham's successor Selig, has publicly backed. State gambling regulators disagree, and several have sued or issued cease-and-desist orders. Meanwhile Polymarket, which spent 2025 acquiring a CFTC-licensed exchange (QCEX, for $112 million) specifically to sidestep this fight, operates under a different legal theory entirely.
This guide breaks down prediction markets by state as of early 2026: where Kalshi and Polymarket run without friction, where they're actively contested, and what the pending federal legislation could do to the entire map. For the broader legal framework behind all of this, read our companion guide on whether prediction markets are legal in the US.
The Current State-by-State Landscape
The table below reflects the contested, fast-moving status of prediction market access across the states most frequently in the news. Status can and does change within weeks — Arizona went from silence to criminal charges in a matter of months.
| State | Status | Kalshi | Polymarket | Notes |
|---|---|---|---|---|
| Tennessee | Favorable ruling | Available | Available | Court ruled FOR Kalshi's federal preemption argument |
| Nevada | Restricted | Blocked | Contested | Gaming regulators ruled against Kalshi |
| Massachusetts | Restricted | Blocked | Contested | State ruled against federal preemption claim |
| Maryland | Restricted | Blocked | Contested | Gambling commission opposition |
| Ohio | Restricted | Blocked | Contested | Casino Control Commission ruling against |
| Arizona | Criminal charges filed | Disputed | N/A | Charges filed March 18, 2026 |
| Remaining 40+ states | Generally available | Available | Available | Kalshi operates via federal CFTC license |
Most of the country falls into that last row. Kalshi, as a CFTC-regulated designated contract market, currently operates in 40+ states without needing separate state-by-state licensing — the same legal structure that lets a Chicago futures exchange list corn contracts without asking permission from Illinois. That's the entire basis of the federal preemption argument, and it's the reason this fight is happening in courtrooms instead of state legislatures alone.
Why Federal Regulation Is Colliding With State Gambling Law
Kalshi's core legal argument is straightforward: it's registered with the Commodity Futures Trading Commission as a designated contract market (DCM), the same category of regulation that governs the CME and ICE Futures. Under the Commodity Exchange Act, federally regulated derivatives markets are generally exempt from state-level gambling and gaming law — that's federal preemption, and it's not a novel theory. It's the same doctrine that lets national banks operate under federal charter without 50 separate state banking licenses.
State gambling regulators see it differently. Nevada, Massachusetts, Maryland, and Ohio have each concluded that event contracts on sports outcomes function identically to sports betting, and that sports betting requires state licensing regardless of what federal wrapper sits around it. Tennessee's court disagreed and sided with Kalshi's preemption argument — the first major ruling to go Kalshi's way. That split is exactly why this issue is heading toward Congress rather than getting resolved state by state.
CFTC Chairman Selig has publicly supported federal preemption as the cleaner regulatory outcome, which matters because it signals where the federal agency itself wants this to land. If you want the deeper legal mechanics behind this argument, our guide on prediction market insider trading regulation covers how the CFTC's enforcement posture has evolved alongside this state fight.
States Where Prediction Markets Operate Without Restriction
In the large majority of states, Kalshi lists sports, political, and economic event contracts the same way it would list any other derivative — no separate state gambling license, no local sportsbook partnership required. This is the structural advantage Kalshi has over traditional sportsbooks like DraftKings, which need a license in every single state where they operate. Read our Kalshi review for the full breakdown of how the exchange model works day to day.
Polymarket's situation is more layered. For years Polymarket operated primarily as an offshore, crypto-native platform not formally licensed for US retail users, which is part of why the CFTC settled with Polymarket back in 2022 over unregistered event contracts. The 2025 acquisition of QCEX for $112 million was specifically designed to give Polymarket a legitimate CFTC-licensed pathway back into the US market, backed by ICE's investment of up to $2 billion. Our Polymarket review covers where that regulatory push currently stands.
Robinhood's prediction hub, which is powered by Kalshi's infrastructure, inherits Kalshi's state-by-state footprint. If Kalshi is restricted in your state, Robinhood's prediction markets tab typically is too — see our Robinhood prediction markets review for specifics. Same logic applies to OG's prediction market layer inside Crypto.com; check our OG review if you're weighing platform options based on your location.
States Actively Fighting Prediction Markets
Four states have taken the most aggressive positions against Kalshi's model, and each arrived there through a slightly different route.
Nevada treats event contracts on sports outcomes as functionally identical to sports wagering, which under Nevada law requires a state gaming license regardless of federal derivatives status. Nevada's Gaming Control Board has been among the most vocal state regulators pushing back on the federal preemption argument.
Massachusetts reached a similar conclusion through its own regulatory review, explicitly rejecting the idea that a CFTC license overrides state gambling authority. Maryland and Ohio followed comparable logic through their respective gaming and casino control commissions. All four states share the same underlying disagreement: they view sports-outcome contracts as gambling products first and derivatives products second, and they're not willing to defer to federal classification.
Arizona escalated further than any other state. On March 18, 2026, Arizona filed criminal charges against Kalshi — not a civil cease-and-desist, actual criminal proceedings. That's a meaningfully different level of state pushback than a regulatory ruling, and it signals that at least one state attorney general is prepared to treat unlicensed event contract trading as a criminal matter rather than a licensing dispute. Eleven states introduced related legislation in 2026 alone, which tells you this isn't a four-state problem — it's a live national fight with more entries likely before year-end.
Kalshi Legal States vs Polymarket Legal States
The two biggest platforms — which together account for roughly 97.5% of total prediction market volume — face different legal exposure because they're built on different regulatory foundations.
| Factor | Kalshi | Polymarket |
|---|---|---|
| Regulatory basis | CFTC-regulated DCM | CFTC license via QCEX acquisition (in progress) |
| State legal theory | Federal preemption of state gambling law | Federal licensing pathway, historically offshore-first |
| Contested states | Nevada, Massachusetts, Maryland, Ohio, Arizona | Overlapping but less litigated directly |
| Settlement | USD | USDC on Polygon |
| 2025-2026 posture | Defending preemption in court | Building compliant on-ramp via QCEX |
Because Kalshi is the party with the existing CFTC-regulated exchange status, it's also the party absorbing most of the direct state litigation. Polymarket's QCEX acquisition means its long-term legal exposure looks more like Kalshi's going forward, but as of early 2026 much of the state-level fighting has centered specifically on Kalshi's contracts. If you're deciding between the two platforms generally, our Polymarket vs Kalshi comparison covers fees, markets, and UX differences beyond the legal question.
What Happens If You Trade From a Restricted State
Platforms in contested states typically geoblock rather than leave enforcement to the user — Kalshi and Polymarket both use IP and account verification to restrict access from states where they've been formally blocked. If you're physically located in Nevada, Massachusetts, Maryland, or Ohio, you should expect account restrictions, deposit blocks, or outright inability to open new positions on affected products, not a legal gray area you can quietly work around.
Using a VPN to bypass a state restriction isn't a clever workaround — it's a terms-of-service violation that can get your account frozen with funds tied up in an appeals process, and in Arizona's case now potentially something with actual legal exposure given the criminal charges filed there. This is genuinely different from the tax reporting gray area covered in our prediction market taxes guide, where the IRS has issued zero formal guidance. State access restrictions are enforced access rules, not ambiguous tax questions — treat them accordingly.
The Federal Legislation That Could Reshape This Map
Two pieces of federal legislation are working through Congress right now, and either one could override every state ruling discussed above. The Schiff-Curtis bill, formally titled the
