Best Prediction Markets in the USA

Prediction markets in the USA

Prediction markets have gone from a niche corner of finance to one of the fastest-growing ways to bet on sport in the United States, and new operators are launching event contracts every month. 

It's a confusing landscape for newcomers, with regulators, sportsbooks and courts all still fighting over what these platforms actually are. 

SportsBoom’s guide breaks down how prediction markets work, who the major operators are, and where you can legally trade sports contracts right now.

What are Prediction Markets? 

Prediction markets let you trade "contracts" on the outcome of a real-world event rather than placing a traditional bet. 

Buy a "Yes" contract on the Kansas City Chiefs to win their next game, and you're paid $1 per contract if they win, or $0 if they lose, the price you pay to enter reflects the market's live view of the probability. 

It looks and feels a lot like sports betting, but legally it's treated as a derivatives product, regulated at the federal level by the Commodity Futures Trading Commission (CFTC) rather than by state gaming regulators.

That distinction is the whole reason this category exists in its current form. 

Sports markets have been offered widely by CFTC-regulated exchanges since early 2025, after a shift in the regulator's posture toward event contracts. Because the CFTC operates under federal law, platforms like Kalshi and Polymarket have argued they can legally list sports contracts nationwide, sidestepping the state-by-state licensing that traditional sportsbooks have to go through. Dozens of state gaming regulators disagree, and that clash is the defining story of the industry in 2026.

Growth in the category has been extraordinary. Combined monthly trading volume on Kalshi and Polymarket more than quadrupled in the space of eight months, growing from under $5 billion in September 2025 to $24 billion by April 2026, and volumes have kept climbing since. On-chain wagering data shows prediction markets overtaking traditional online gambling for the first time in early 2026, with the category recording $36.6 billion in quarterly volume against $14 billion for on-chain gambling.

How Prediction Markets Work

Every event contract has a "Yes" side and a "No" side, and the price of each, somewhere between $0.01 and $0.99, moves in real time based on trading activity, functioning as an implied probability. 

You can hold your position to settlement, when it resolves at $1 or $0, or sell out of it early to lock in a profit or cut a loss, much like trading a stock. The contracts settle against a defined, publicly verifiable outcome (a final score, a game result, an index reading), and most major platforms have expanded well beyond politics into the big four US sports leagues, tennis, golf, motorsport and beyond.

Fees vary a lot by operator, some charge a flat per-contract fee, others use a variable rate tied to the contract's price at the time of the trade, and a couple of political-only markets take a cut of profits and withdrawals instead. 

As of February 2026, roughly 87% of the $39.7 billion Kalshi traded over the previous year came from sports markets alone, which tells you where the demand in this category is really coming from.

Key differences from traditional sportsbooks

On the surface, buying a "Yes" contract on your team to win looks identical to placing a moneyline bet. 

Underneath, the two products are built and regulated completely differently:

• Regulation: Sportsbooks are licensed state by state through gaming commissions. Prediction markets are licensed federally through the CFTC as derivatives exchanges, which is exactly what most of the current litigation is arguing about.
• Pricing: A sportsbook sets odds and takes the other side of your bet. A prediction market is a peer-to-peer exchange. You're trading against other users, and the price moves with demand, closer to a stock order book than a bookmaker's line.
• Exiting a position: You can typically sell a prediction market contract before the event finishes to lock in a gain or cut a loss. Most traditional sports bets have to be settled at the final whistle, cash-out offers aside.
• Contract types: Sportsbooks specialise in game outcomes, spreads and player props. Prediction markets cover the same sports questions but sit alongside politics, economic data and entertainment markets on the same platform.
• Tax treatment: This is genuinely unresolved. Kalshi still doesn't issue 1099-B forms for event contract trades, and the IRS hasn't issued formal guidance on how these contracts should be classified for tax purposes.
• State tax revenue: Sportsbooks pay state gaming taxes wherever they're licensed. Prediction markets don't, which is a big part of why state regulators and the traditional gaming industry have pushed back so hard.

How Do Prediction Markets Settle Their Bets?

Every contract is tied to a clearly defined, publicly verifiable outcome at the point it's listed, a final score, a game result, an economic data release, an election result. So, there's no ambiguity about what triggers a $1 or $0 payout. The mechanics differ by platform type:

CFTC-regulated exchanges like Kalshi and ForecastEx settle contracts against an agreed, published data source (a league's official result, a government statistics release) under rules filed with the regulator. Settlement is automatic once that source confirms the outcome.

Crypto-native platforms like Polymarket typically settle through a decentralized oracle system, where independent parties stake tokens to report and verify the correct outcome, with a dispute window before funds are released.

Broker-routed platforms like Robinhood and Crypto.com don't settle contracts themselves, they route the trade to the underlying exchange (usually Kalshi) and inherit that exchange's settlement rules and timeline.

In all cases, once a contract settles, funds move automatically to the winning side's account, there's no claims process the way there can be with a sportsbook payout dispute. 

Where things get murkier is around contracts that hinge on a genuinely close or contested call (an officiating decision, a recount), which is part of why the CFTC's 2026 rulemaking proposal is looking to restrict exactly those categories of sports contract.