What is a prediction market?
If you’re not familiar with prediction markets by now, then frankly, where have you been? These innovative new future event trades have skyrocketed in popularity across the US, giving users the opportunity to buy and sell prediction contract positions based on how likely they think a real-world event will happen.
If that sounds a little confusing, don’t worry, because we’ll be covering the how of using prediction markets a little later in this guide. The good news is that many of the USA’s best-known and top-rated prediction market apps are ridiculously easy to use, with pick-up-and-play mechanics ensuring that even the most inexperienced of traders will be able to get to grips with things in just a couple of trades.
But for now, back to the basic definition of these platforms; as the term suggests, prediction markets ask users to predict the outcome of real events, usually in a simple “Yes” or “No” format. If you think an event will happen, you buy a “Yes” contract, and if you think it won’t, you buy a “No” contract – trust us when we say that it really is as simple as that.
It’s worth noting that there are a couple of different variations of prediction market trading contracts beyond the standard binary “Yes/No” system, so we’ll take a look at these (and when you’re likely to encounter them) a little later. But don’t worry, because even they are easy to get your head around, with prediction markets priding themselves on just how easy their platforms are to use.
Are prediction markets legal in the USA?
Generally speaking, prediction markets are legal in the USA, although it’s important to trade only on platforms regulated and approved by the Commodity Futures Trading Commission (CFTC) – the federal body tasked with overseeing event trading tools. The CFTC has issued licenses to several prediction markets in recent years, some of which you can learn more about below.
It’s worth saying that the legal status of US prediction markets remains fluid in some cases, with regional lawmakers in certain states objecting to them. For instance, if you were looking to trade on crypto prediction markets, this might be impossible in some jurisdictions, particularly where state regulators have raised concerns that online event trading is too close to real-money gambling.
So, to summarize: before you access prediction markets in the US, triple-check the T&Cs of the platform you’re hoping to trade at, paying particular attention to its legal status and, crucially, its CFTC licensing credentials. Some markets, products, and even platforms may be unavailable in your state, too, so look for any mention of region-specific restrictions.
Deposit $20 get $50
- Sports event trading is the core of Polymarket’s US offering
- Predict outcomes of NBA, NFL, NHL, MLB, and MLS fixtures
- Live and upcoming fixtures covered
$10 Bonus
+3
- 15+ sports and esports categories
- Game winner, totals, spreads, props, and futures
- Live sports event trading
100% up to $250
+2
- Great support for different sports
- Single game predictions for the outright winner of matches
- Futures predictions for leagues or event champions, and end of season awards
How do prediction markets work?
We’ve provided a basic summary of what prediction markets are, so now it’s time to pop the hood and find out exactly how they work. If you’re new to these kinds of trading tools, now’s the time to don your thinking caps, grab a pen and paper, and settle it for a quick crash course in the process of using US prediction market platforms.
The core mechanics behind prediction market tools in the US
Prediction markets are based on peer-to-peer trading, with an equal number of traders required to keep things ticking over. Every market, price, and probability on these platforms is affected by user trading activity, so things rarely stand still and can change from one moment to the next.
When you land at your first prediction market, you’ll see a huge spread of questions based on future events across a range of topic classes. It’s your job to predict the outcome of these questions correctly, based on whether you think an event will happen or not.
For instance, in sports prediction markets, it may be a case of answering “Yes” or “No” to a question like “Will the Yankees win against the Red Sox in their next MLB game?” You can then purchase one or more event contracts to make your prediction; remember, “Yes” if you think they will, and “No” if you think they won’t.
How are event contracts valued on prediction markets?
When you’re purchasing “Yes/No” event contracts, each is allocated a price from $0 to $1. The value of these contracts can fluctuate up or down with new trading activity.
One of the most important things to remember about how prediction markets work is that this per-contract price reflects probability. So, if a “Yes” contract was valued at $0.40 per share, this denotes 40% probability that said event will happen; meanwhile, on the “No” side, you’re looking at $0.60 per share, or 60% probability.
Note that contract prices can change up or down right up to the moment that a trade resolves; i.e., in the case of our earlier Yankees vs Red Sox example, at the bottom of the ninth with the final out. That’s why event trading tools let users buy or sell positions right up to the moment of resolution, so you can spot opportunities to buy/sell and (hopefully) turn a larger profit.
How do you win and make money on prediction markets?
Speaking of profit, it’s time to hone in on how traders “win” when using prediction markets. Success in future event trading relies on making correct predictions. Guess the outcome of an event correctly, and the trade will pay out at $1 per contract; get it wrong, and it will resolve at $0.
So, let’s say you’ve purchased a $0.40 position on the Yankees to win over the Red Sox. If they win, you get $1, meaning $0.60 in profit. If they lose, you get nothing, so you’ve lost your initial investment of $0.40.
That’s a basic summary of how profit/loss works at prediction markets. Obviously, most of the time, you’ll be purchasing two or more shares in a single transaction, so you’ll need to scale up the maths slightly. For example, if you were to buy 100 shares on the Yankees to win at $0.40, this would require an initial investment of $40. Based on the above profit/loss formula, you would make a $60 profit if they won, while losing your $40 stake if they lost.
What are the different types of event contracts on prediction markets?
We promised you a summary of the different types of contracts you might encounter on prediction markets, so here we go. Note that the basic “Yes/No” binary model is the most common contract type, but you might come across the others on certain markets and trades.
| Contract type | Details |
| Binary (yes/no) | The price you pay per contract denotes the perceived probability that an event will happen. |
| Categorical (multiple choice) | You’re served multiple choice outcomes and must pick the one you think is most likely to happen. |
| Scalar (range-based) | Gives you the chance to predict the outcome of an event based on predefined ranges, i.e., 0-3% or 3.5-5%, for example. |
A step-by-step look at using prediction markets
We appreciate that there’s a lot of information to grapple with here, so it might be useful to take a step-by-step look at how the process of using prediction markets actually plays out. If you’re someone who learns by doing, this is the part of our guide you’ve been waiting for.
- Get started with a new prediction market platform that’s 100% legal in your state. We’ve suggested some of our favorite tools of the moment down below.
- Register for a new account and complete the necessary verification checks; this might involve uploading supporting evidence like a copy of your government-issued ID (passport/driver’s license) and a recent utility bill confirming your address.
- With your account ready to go, the next step is to add trading funds. Most US prediction markets let you add/withdraw funds using a debit or credit card, standard bank transfer, mobile payment services (Apple Pay and Google Pay), and some e-wallets like PayPal or Skrill.
- With trading funds added to your account, it’s time to start exploring your preferred markets and topic classes. Prediction markets pride themselves on offering heaps and heaps of different trading opportunities, from political prediction markets to climate-related trading, so you can learn more about some of the core markets down below.
- When you’ve found a trade you like, take a look at its per-contract pricing to weigh up the probability. Select the outcome that you believe is most likely before choosing the number of shares you want to buy.
- When executing your trade, you’ll see the total cost plus any trading fees levied by the platform; this is how they take their cut. Follow the steps to lock in your position.
- With your trade locked in, the waiting game begins. Don’t forget that you can buy or sell your position at any time right up to the moment that the event resolves, so it’s important to monitor market activity and pricing closely to weigh up your risk vs reward profile.
- When the event resolves, you can review your profit/loss from your account screen. Any profits owed will be automatically allocated to your account, while your balance will remain the same if you’ve made an incorrect trade (since you’ve already used a portion of your funds to invest in a losing contract).
So, there you have it, a step-by-step look at trading on prediction markets. Of course, that’s only a basic summary of the process, and it might look slightly different depending on, say, the contract type. For more tips, guidance, and advice, learn more about prediction markets right here.
What kind of things can you trade on at US prediction markets?
A better question might be “what can’t you trade on at US prediction markets?”, such is the variety of different topics and trading areas that you’ll find on these platforms. As alluded to earlier, prediction markets open the floor to every type of event trade, and since they’re decided on a peer-to-peer basis, there is no real limit to the variety of topics and market types you can trade on.
With that said, let’s take a look at some of the most popular event trading topic classes that you might encounter on US prediction markets:
🏅 Sports
Sports event trading attracts a lot of market activity and trade volume, with users able to predict the winners and losers of any number of upcoming and live fixtures. It’s not just outrights that you can make predictions on either; prediction markets often include props, futures, and totals as part of their sports event trading offerings, so you can really flex your knowledge of different leagues, teams, and tournaments.
🎬 Culture
Think a certain movie will win big at next year’s Oscars? You can trade on that. Heard a hit song that could top the Billboard charts? You can trade on that, too. Culture prediction markets give you the scope to make predictions on a broad range of topics from across the world of movies, music, TV, and media, with the peer-to-peer format of these platforms ensuring that you can lock in trades on just about any culture-related theme or topic that you can think of.
🏛️ Politics
Since politics always makes the headlines in one form or another, it’s no wonder that political event trading is among the most popular topic classes at online prediction markets. From geopolitics covering world events and current affairs to local elections in your states, it’s possible to make predictions on a massive variety of political happenings, with prices and probability affected by real-time news and polling data.
💰 Finance and economy
You don’t need to be a stockbroker to make predictions on topics concerning finance and economic prediction markets. Prediction trading tools present the chance to make predictions on a broad range of topics related to finance, crypto, and the economy, although it is worth noting that some exclusions may apply depending on where you’re located and the platform you’re hoping to use.
💻 Tech
Whether it’s the new iPhone release date or predictions made on the future of AI, it’s possible to make forecasts on all kinds of topics from across the world of tech and science. In our experience, tech prediction markets are great for those looking to buy a position on long-term trades, like, for example, the EV market share in 2030 or the date when the US will grant a license for the construction of a new nuclear reactor.
🌍 Climate
From the chance of snowfall in your local area to climate targets and weather events from around the world, climate prediction markets are pretty popular, covering all kinds of live and upcoming happenings. If you know your way around a weather forecast and like to predict when climactic events are likely to happen, this could be the perfect topic class category for you.
Discover three of our favorite US prediction markets
The popularity of prediction markets is booming in the US, so – state permitting, of course – you should find that there is a choice of prospective platforms available to you. The question is, which ones are the best?
| Prediction Market Sites | Welcome Offer |
| Polymarket | Deposit $20 Get $50 |
| Kalshi | $10 Bonus |
| Crypto.com | 100% up to $250 |
| OG | Trade $20 Get $20 Bonus |
| Underdog Predict | No bonus at the moment |
| PrizePicks | Trade $5 Get $50 Bonus |
| Fanatics Markets | Up to $100 Bonus |
| Fanduel Predicts | $25 Bonus |
| Robinhood | Up to $200 Bonus |
| Coinbase | N/A |
| Draftkings Predict | 100% Match up to $10 |
| MooMoo | N/A |
| ROLR | N/A |
| Gemini | N/A |
| WeBull | N/A |
| Interactive Brokers | $10 Bonus |
| Novig | N/A |
| ProphetX | N/A |
| TruthPredict | Not fully live yet |
Kalshi – Fully regulated and ready to use in the USA
- Sports, politics, and crypto predictions
- Economics, culture, and climate events
- Optimized Android and iOS apps
- 2% debit card deposit fee
Kalshi is easily one of the best-known and most accessible prediction market trading tools in the USA. And it’s definitely fair to say that this platform has a serious trump card over its competitors: it’s fully regulated, licensed, and backed by the CFTC, meaning it’s already up and running in all 50 US states.
Of course, it isn’t just sound licensing credentials that Kalshi has going for it. The platform is revered for its simple, no-nonsense trading mechanics, which are super-beginner-friendly. There’s also a wide range of trading topics to explore, from economics to climate and everything in between.
Polymarket – Expect fast-moving markets and more trading variety
- Polymarket is live in the USA
- Easy pick-up-and-trade mechanics
- Sign-up rewards may be available
- Beginner-friendly platform
- Dynamic trading topics
- Long wait list to join
- High regulatory scrutiny
- Not all markets are available yet
It’s fair to say that Polymarket has been the thorn in the side of the CFTC for some months now, but in late 2025, the regulator finally relented and let the platform set up shop officially in the US. While Polymarket remains in its roll-out stage right now (with new members required to join a waiting list to gain access), its deployment across the States is happening, slowly but surely.
That’s great news for prospective traders looking to take advantage of Polymarket’s super-niche and peer-driven trading markets, which, remarkably, cover even more ground than those of Kalshi. And, since Polymarket is only partially regulated, its markets are more fluid and fast-moving, so you can expect a more volatile (and perhaps, exciting) trading experience. The trade-off? Polymarket isn’t expected to be available in all US states.
Crypto.com – A polished platform with both crypto and fiat funding options
- Great range of sports predictions
- Simple fee structure
- Stylish website and mobile apps
- Good trade volume for its predictions
- The app is geared towards crypto trading
- No welcome bonus
Crypto.com has quietly taken the USA’s prediction market industry by storm, now rivalling Kalshi in terms of active trading volume and market growth. Like its counterpart, it too has the full backing of the CFTC, so it’s already available in most parts of the USA, and it also benefits from one of the slickest trading apps in the biz.
Elsewhere, one of the other core benefits of using Crypto.com is that you can add/withdraw funds from your trading account using both fiat and digital cryptocurrencies. Granted, this attribute may only appeal to a niche group of traders, but it’s something that sets it apart from other CFTC-approved prediction markets out there.
Sponsored by Crypto.com – Not investment advice. Trading prediction markets and crypto involves risk, including potential loss of your stake. Consider your risk tolerance before participating. Crypto.com connects U.S. users to CDNA (regulated by CFTC) for derivatives trading. CDNA membership required. Trading may not be suitable for all—you could lose your entire investment plus fees. Past performance doesn't guarantee future results. This is not a solicitation or recommendation to trade.
What are the pros and cons of using a prediction market?
Before we wrap up our bumper guide on US prediction markets, let’s circle back through this resource to identify the core pros and cons to be aware of before you participate in future event trading.
- Easy yes/no trading mechanics
- Huge variety of markets and topic classes
- Understandable risk-vs-reward profile
- Option to exit early if you feel at risk
- Reputable brands have CFTC approval
- Long-term regulatory uncertainty remains
Are you ready to try prediction market trading for yourself?
Phew – well done if you made it to the bottom of our prediction market guide, which should have given you a solid foundation to start using these innovative trading tools. While it’s important to always consider the risk of losing money when making event predictions, the backing and regulation of the CFTC does speak volumes about the legitimacy of platforms like Crypto.com, Kalshi, and Polymarket.
Ready to get started? Use the links around this page to learn more about prediction market trading or check out Kalshi, Polymarket, and Crypto.com for yourself.
Check out these top prediction market sites
Deposit $20 get $50
- Sports event trading is the core of Polymarket’s US offering
- Predict outcomes of NBA, NFL, NHL, MLB, and MLS fixtures
- Live and upcoming fixtures covered
$10 Bonus
+3
- 15+ sports and esports categories
- Game winner, totals, spreads, props, and futures
- Live sports event trading
100% up to $250
+2
- Great support for different sports
- Single game predictions for the outright winner of matches
- Futures predictions for leagues or event champions, and end of season awards
Trade to get up to $100 in Bonuses!
+6
- 7+ sports for predictions
- Parlays and same-game parlays
- Live sports event trading
200% up to $100
- Predict the outcome of sports such as tennis, soccer, and more
- Major sports leagues and tournaments are covered
- Multi-team predictions are available
Prediction market FAQs
Are prediction markets the same as gambling sites?
No. Prediction markets operate under the regulatory and legal framework of financial institutions like the CFTC, while gambling sites do not. Note, too, that these are peer-to-peer exchanges, with no middleman and no house edge.
Do you need to pass Know Your Customer (KYC) verification checks to use US prediction markets?
Yes, absolutely. As part of CFTC regulations, all new traders must pass KYC verification before they can deposit funds or begin trading on a prediction market.
What is the maximum you can lose when using prediction markets?
You can lose whatever you paid to purchase a set of event contracts. For instance, if you purchased $150 worth of “Yes” contract shares, but the outcome did not happen, you would lose your $150 stake.
