New Jersey yesterday asked the Supreme Court to rule on whether states can regulate sports betting on prediction markets such as Kalshi.
“Companies like Kalshi claim to offer legal sports betting in all 50 states, but they refuse to follow the gambling laws of any state," New Jersey Attorney General Jennifer Davenport said in a press release announcing the lawsuit.
In April, the US Court of Appeals for the 3rd Circuit ruled that New Jersey cannot regulate sports bets on prediction markets. The court determined that sports-related event contracts meet the legal definition of "swaps," giving the US Commodity Futures Trading Commission (CFTC) exclusive jurisdiction.
Kalshi today lost a major ruling over whether it can evade state gambling laws, as a federal appeals court found that Nevada can stop the prediction market from allowing sports bets. While the Trump administration is trying to help prediction markets avoid state regulation, a panel of three Trump-appointed judges unanimously ruled against Kalshi in today's decision from the US Court of Appeals for the 9th Circuit.
The Nevada Gaming Control Board today said the 9th Circuit "emphatically reject[ed] the view that the federal Commodity Exchange Act preempts application of Nevada’s gaming laws to sports-event contracts offered by Kalshi, Crypto.com, and Robinhood." Nevada Governor Joe Lombardo, a Republican, said that "prediction markets offering sports-event contracts constitute gambling and must comply with Nevada’s gaming laws and regulatory framework."
The judges affirmed a district court order that let Nevada enforce state laws against Kalshi’s sports-related event contracts.
I’ve traded on both for about a year now, so here’s the version that skips the marketing comparison tables. The short version: they’re not interchangeable, and which one you can even use often gets decided for you by where you live.
The fee structures aren’t even measured the same way. A standard sportsbook prices in roughly 5.3% margin on a typical two-way line (1.95/1.85 odds). Kalshi charges per contract instead — a cent or two depending on price, no flat percentage. The terminal I use on Polymarket’s liquidity charges a flat 1% of volume. Three different units, which makes “which is cheaper” depend entirely on how you trade, not just which platform you pick.
Kalshi vs Polymarket: the structural difference
Kalshi is a CFTC-regulated Designated Contract Market — a federally regulated exchange, which is exactly why it’s legal in states like Texas where traditional sportsbooks aren’t. Polymarket isn’t CFTC-registered the same way, which is part of why its US access situation is closer to “restricted” than Kalshi’s “regulated and open.”
That regulatory gap shows up in practice as two different products with overlapping goals. Kalshi’s federal registration means it can operate openly across most US states without the geoblocking Polymarket applies. Polymarket’s advantage runs the other direction — deeper liquidity specifically in sports and esports categories, built up over a longer operating history in that niche, even without the same US regulatory clearance.
Kalshi fees: not a percentage, a per-contract charge
Kalshi fees run roughly $0.01–$0.02 per contract depending on where the price sits, and the charge doesn’t change by which state you’re trading from. For high-volume, low-price trades this adds up differently than a percentage-of-volume model — worth actually running the math for your own trading pattern rather than assuming one fee structure is universally cheaper.
Kalshi vs Polymarket comparison: the number that actually matters
Run your own trade volume through both fee structures before picking one — a cents-per-contract model and a percentage-of-volume model cross over at different points depending on contract price and size. There’s no single answer that holds for every trader; the comparison only means something once you plug in your own numbers.
Robinhood prediction markets: the newest entrant
Robinhood has moved into event contracts too, layering prediction markets onto an app most people already have for stocks. It’s worth knowing about as a comparison point — one more sign this category isn’t a niche experiment anymore, it’s attracting mainstream brokerages, not just crypto-native platforms.
Best prediction markets: there isn’t one universal answer
“Best” depends entirely on what you’re optimizing for. Regulatory clarity in the US points toward Kalshi. Sports and esports market depth is where a terminal built on Polymarket’s liquidity — like the one I use — tends to have the edge, since that’s specifically what it’s built around rather than being one category among many alongside politics, economics, and culture.
Anyone answering “which is best” without asking what you’re trading is skipping the part of the question that actually determines the answer.
Best prediction market app: judged by what, exactly
An app being polished doesn’t tell you about liquidity depth in the specific category you actually trade. A clean interface with a thin order book in your market of interest is worse than a rougher one with real volume behind it — check the book before judging the app.
Prediction market apps: the crowded field, and the best prediction market apps right now
DraftKings prediction markets: sportsbooks entering from the other side
DraftKings, a sportsbook by origin, has been moving into prediction-market-style contracts too — the reverse direction from Kalshi and Polymarket, which started as exchanges and are picking up sports coverage. Worth watching which direction the category consolidates toward.
Polymarket competitors: the honest list
Kalshi is the most-discussed. Robinhood and DraftKings are newer entrants approaching from different starting points — a brokerage and a sportsbook respectively. None of them are identical products; they’re solving overlapping but not identical problems, and lumping them together in one “best of” list obscures more than it explains.
Picking between them isn’t really about finding “the winner” — it’s about matching the regulatory situation and category depth to what you’re actually trying to trade. Someone focused on US election markets has different priorities than someone focused on NFL game outcomes, and the right platform for one isn’t automatically right for the other.
Kalshi alternative: when Polymarket-based access makes more sense
If Kalshi doesn’t cover a market you want, or you’re outside its accessible regions, a terminal on Polymarket’s liquidity is the alternative — specifically strong on sports and esports coverage rather than the broader mixed-category approach Kalshi takes.
Canada: Kalshi arrived first, via Wealthsimple — with sports carved out
Canada’s situation is easy to get wrong. Wealthsimple, a major Canadian brokerage, got regulatory approval to offer event contracts to Canadian users — but sports was explicitly excluded from that approval. That’s the detail most coverage skips: Canadians can access some Kalshi-style event contracts through Wealthsimple, just not sports ones.
For sports specifically, that gap is exactly what a sports-focused terminal fills. It’s a distinction worth being precise about, because a Canadian reader searching “Kalshi Canada” is likely to land on coverage that talks about event contracts generally without mentioning that the one category they probably care about — sports — isn’t part of what’s currently permitted through that specific channel.
How I actually trade
Access — wallet created automatically, no separate signup form.
Deposit — USDT, network fee shown as its own line.
Pick a sports or esports market on the live board.
Trade — contract price set by the order book, flat 1% fee shown before confirming.
overdog.bet is what I use for sports and esports specifically. My trade history sits on the proof page — public.
FAQ
Is Kalshi legal in Texas? Yes — Kalshi is a CFTC-regulated federal exchange, which puts it outside Texas gambling law entirely, unlike a state-licensed sportsbook.
Is Kalshi legal? Legal federally as a CFTC-regulated exchange, available in most US states. A handful of states have pushed back on specific contract categories, so availability isn’t perfectly uniform everywhere.
Is Kalshi legal in Canada? Not directly as Kalshi — but Wealthsimple offers similar event contracts under its own regulatory approval, with sports specifically excluded from what’s currently permitted.
Responsible gambling isn’t a line to skip. If trading stops being a deliberate decision and starts being a way to cover a budget gap, that’s a reason to pause, not size up.
Washington AG Nick Brown filed the lawsuit against Kalshi in March. (Photo courtesy of the Washington Attorney General’s Office)
A judge in Seattle ordered Kalshi to shut down large parts of its prediction market in Washington state by Sept. 2 — less than three weeks from now — and denied the New York-based company’s attempt to pause the order while it appeals the ruling.
The order by King County Superior Court Judge John McHale, issued Wednesday, requires Kalshi to geofence Washington users out of markets for sports, elections, politics, entertainment, culture, tech and science, and “mentions,” contracts on whether public figures will say specific words.
Kalshi can continue offering markets on commodities, climate, economics, and finance in the state. Users will also be allowed to close out positions they already hold in the prohibited categories.
The order sets a $120,000-a-day penalty if Kalshi misses the Sept. 2 deadline, although Kalshi can also submit an affidavit explaining any delay and let the court determine the final penalty.
That penalty would match what Nevada regulators are separately seeking from Kalshi in a June contempt motion for allegedly failing to comply with a similar injunction there.
In his ruling, McHale wrote that Kalshi “willfully ignored” a Washington State Gambling Commission notice from December 2025 stating that event-based contracts are not authorized in the state. He also concluded that “the public interests at stake and potential harm to consumers” outweigh harm to Kalshi from the injunction.
Kalshi disputed the premise of the ruling on Thursday, reiterating its position that the U.S. Commodity Futures Trading Commission “has exclusive jurisdiction” over the exchange.
“We respectfully disagree with the court’s decision and are considering all legal options,” spokesperson Jacki McGavick said in a statement responding to the ruling.
Attorney General Nick Brown, who brought the suit, said in a statement that Kalshi “has gotten rich promoting wagers on sports, elections, natural disasters, events related to the Iran War, and more.”
However, Kalshi said its platform does not offer markets on wildfires, war, death, or terrorism. Kalshi has disputed reporting that has grouped its platform with rival Polymarket, which has drawn scrutiny for wildfire and other markets Kalshi says it doesn’t allow.
Kalshi had asked both McHale and the state Court of Appeals to pause the injunction pending appeal, and lost at both levels: a Court of Appeals commissioner denied an emergency stay request Monday, and McHale entered his own denial Wednesday with his larger order.
Kalshi’s remaining state-court options include asking a full Court of Appeals panel to review the commissioner’s ruling, or seeking emergency review at the Washington Supreme Court.
Neal Katyal, a former U.S. acting solicitor general who leads Milbank’s U.S. Supreme Court practice, is representing Kalshi in state cases across the country. (Milbank Photo)
Washington state is emerging as a key battleground in the national fight over whether federal commodities oversight allows prediction markets like Kalshi to override state gambling laws.
King County Superior Court Judge John McHale in Seattle sided with Washington Attorney General Nick Brown on July 20, granting a preliminary injunction and rejecting Kalshi’s core defense: that oversight by the U.S. Commodity Futures Trading Commission preempts state gambling law.
A check of the docket shows the case has escalated significantly since then. Kalshi has appealed to the Washington Court of Appeals, and asked McHale to pause his injunction pending that appeal.
Court records also indicate that former U.S. Acting Solicitor General Neal Katyal, Kalshi’s lead national counsel in similar state cases, is now representing the company in the Washington state case. The involvement of a lawyer with years of experience arguing before the U.S. Supreme Court signals that Kalshi is preparing for a serious appellate fight over federal preemption rules.
McHale has yet to rule on Kalshi’s stay motion or enter the operational terms of his injunction, which means the platform is still operational in the state nearly three weeks after his ruling.
Both sides have been pushing to shape McHale’s decision, submitting federal court rulings from other states for his consideration.
McHale’s next ruling, expected in the coming days, should determine whether Kalshi will have to stop operating in Washington state while its appeal plays out.
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