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Eleven US states have yet to legalize sports betting, leaving residents with few options to wager legally on sports. That’s changing rapidly — not because lawmakers are pushing sports wagering laws, but because prediction markets are available in all 50 states, including those where sports betting is illegal.
However, bettors who visit prediction market sites like Kalshi may be confused about whether the platforms are legal and how to use them.
Are prediction markets legal in states without sports betting?
Yes. You can buy a contract on a prediction market platform even in states where sports betting is outlawed. Prediction markets offer contracts on future events rather than odds-based wagers. Because of this, they fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC) rather than a state gaming commission or lottery.
Residents of the following states can buy contracts on sporting events (and non-sporting events) through prediction markets such as Kalshi and Fanatics Markets, even though sports betting is illegal there:
- Alabama
- Alaska
- California
- Georgia
- Hawaii
- Idaho
- Minnesota
- Oklahoma
- South Carolina
- Texas
- Utah
How to legally use prediction markets where sports betting is banned
Signing up for a prediction market is generally easier than creating an account on sports betting apps or websites. You provide a login name and password or log in using a Google or Apple account.
Unlike traditional sports betting platforms, which often require a detailed application and verification of your location and personal information, you can set up a prediction market account in just a few clicks with no personal data required.
Once your account is created, you have access to all of the “contracts” (similar to bets), including markets for NFL and college football games, as well as a wide range of non-sporting contracts, such as politics, culture, crypto, climate, economics, companies, finance, technology, science, health, and world events.
When you find a contract you want, you’ll need to make a deposit if you haven’t already. Then, you choose the contract — prediction markets offer “yes” and “no” options that pay out $1 if you win — and select how many contracts you want to buy.
Here’s a simplified explanation of how prediction markets price events. If your contracts “win,” you earn $1 for each contract purchased. If you lose, you forfeit your investment. For example, if you buy 100 “yes” contracts at 59 cents each on the Los Angeles Rams reaching the Super Bowl and they do, you win $100. If they don’t, you lose $59.
How to buy and sell contracts on prediction markets
Prediction markets also allow you to sell contracts at any time, a feature not typically offered by sports betting platforms. For instance, if you buy 100 contracts at 55 cents each and their value rises to 65 cents, you could sell for a 10-cent profit per contract.
The opposite is also true. If you hold 100 “yes” contracts for the Kansas City Chiefs going to the Super Bowl and a key player is injured, you can sell your contracts at a small loss before the market value drops further.
Why prediction markets are a legal alternative to sports betting
As more Americans look for ways to engage with sports and other events, prediction markets offer a legal, accessible option in states where traditional sports betting remains prohibited. While they operate differently from sportsbooks, these platforms allow users to participate in a wide range of markets — from football games to politics and finance — without running afoul of state gambling laws.
For bettors in states without legalized sports betting, prediction markets are quickly becoming a viable alternative, combining flexibility, transparency, and ease of use.
