The Short Answer: It's Complicated
Polymarket is a decentralized prediction market platform built on the Polygon blockchain. It lets users bet real money on the outcomes of political events, economic data releases, sports results, and more. The markets are genuinely useful for gauging collective probability estimates on everything from election results to Federal Reserve decisions.
But for American users, the legal picture has never been clean. As of 2026, US residents are officially blocked from using Polymarket under the platform's own terms of service. That restriction didn't come from nowhere. It traces back directly to a 2022 settlement with the Commodity Futures Trading Commission (CFTC).
What Happened with the CFTC
In January 2022, the CFTC fined Polymarket $1.4 million for operating an unregistered swap execution facility and offering binary options contracts to US persons without the proper regulatory authorization. Polymarket settled without admitting or denying the findings, and as part of that settlement, agreed to block US users and wind down any markets that didn't comply with CFTC rules.
That's the foundation of where things stand today. Polymarket didn't get shut down entirely. It simply agreed to exclude American traders and to operate in a way that keeps the CFTC at arm's length going forward.
Why the CFTC Cares About Prediction Markets
The CFTC regulates derivatives, which includes futures, swaps, and options on commodities. The agency's position is that event contracts, meaning contracts whose payout depends on the outcome of a specific event, often qualify as regulated products under the Commodity Exchange Act.
Prediction markets fall squarely into that territory. When you buy a contract on Polymarket that says "Donald Trump wins the 2024 election" and you get paid $1 if he wins or $0 if he loses, the CFTC considers that a binary option. Binary options are regulated. Offering them without registration is a violation.
The tricky part is that prediction markets have obvious informational value. Academic researchers, news organizations, and policy analysts use them as real-time probability gauges. That social utility doesn't make them legal, though.
Can US Users Access Polymarket Anyway?
Yes, technically. Some US residents use VPNs like NordVPN, ExpressVPN, or ProtonVPN to mask their location and access the platform. Since Polymarket is decentralized and operates via smart contracts on the Polygon network, there's no central server to fully enforce geographic restrictions.
We want to be direct here: using a VPN to access a platform you're legally prohibited from using doesn't make the activity legal. It may violate Polymarket's terms of service, and depending on interpretation, it could expose you to legal risk under US law. We're not lawyers, and this isn't legal advice. But if you're asking whether the workaround is legally safe, the honest answer is no one really knows, and "probably fine" is not a legal standard.
What About Kalshi?
This is where it gets more interesting. Kalshi is a CFTC-regulated prediction market that operates legally in the United States. It launched after receiving CFTC approval in 2020, making it the first federally regulated event contracts exchange in the country.
Kalshi lets US residents trade on economic events, weather outcomes, Federal Reserve decisions, and more. The markets are real, the contracts are legitimate, and there's no need to route traffic through a foreign server to participate. We've covered Kalshi's weather trading mechanics in detail in our Kalshi weather trading strategy guide, which is worth reading if you want to understand how event markets actually work in a regulated context.
The tradeoff is that Kalshi has fewer markets than Polymarket and lower liquidity on some contracts. Polymarket, with its global user base, often has more participants and tighter spreads on major political events. But for US residents who want to stay on the right side of the law, Kalshi is the real option.
The Political Environment in 2026
The regulatory mood around prediction markets has shifted since 2022. There's been growing bipartisan interest in allowing broader event contract trading in the US, partly because of how accurately these markets predicted major political and economic outcomes during the 2024 election cycle.
Polymarket's predictions attracted enormous media attention during the 2024 presidential race. The platform's markets were cited in major news outlets as real-time probability gauges. That visibility has pushed Congress and the CFTC to think harder about whether the current framework actually serves the public interest.
As of early 2026, there are active legislative discussions about expanding the legality of event contracts for US residents. Nothing has passed yet. The CFTC under its current leadership has signaled some openness to regulated prediction markets, but the formal rules haven't changed. US residents are still blocked from Polymarket specifically.
Could Polymarket Re-Enter the US Market?
It's possible. If the CFTC creates a clearer regulatory path for decentralized prediction markets, or if Polymarket were to register as a designated contract market, the platform could theoretically serve American users again. Given the platform's growth and the political attention around prediction markets, this isn't far-fetched.
Several crypto-native prediction market platforms are actively pursuing regulatory approvals. The broader trend in 2026 is toward more structured integration between blockchain-based financial products and traditional regulatory frameworks. Polymarket would be well-positioned if that door opens.
How to Think About Prediction Markets for Research
Even if you can't trade on Polymarket, the data is publicly visible. You can view market prices without an account. Many analysts and researchers use Polymarket's probability data as a research input, essentially treating market prices as crowd-sourced forecasts.
This is a legitimate use case that raises no legal issues. If you're doing geopolitical research or tracking election probabilities, reading Polymarket prices is no different from reading a poll. You're just consuming data. We've found this particularly useful when combined with AI research tools. Check out our roundup of the best AI research assistants in 2026 for tools that can help you synthesize prediction market data with other sources.
For deeper geopolitical analysis, tools built specifically for that purpose give you a lot more context than raw market prices alone. Our coverage of AI geopolitical risk analysis tools walks through the best options if you need to go beyond the numbers.
Alternatives for US Traders Who Want Exposure to Uncertain Events
Beyond Kalshi, US residents have a few other options depending on what they're actually trying to do.
- Kalshi: The only federally regulated event contracts exchange. Best for economic and policy-related events.
- PredictIt: Operates under a CFTC no-action letter that allows limited political prediction markets. Has restrictions on position size and number of traders per market. Its regulatory future has been uncertain but it continues to operate.
- Traditional financial instruments: If you're trying to hedge against a specific economic outcome (say, a rate hike or a recession), there are often regulated options, futures, or ETFs that serve a similar function.
- AI-powered investing platforms: Tools like Betterment and Wealthfront use algorithmic models to optimize portfolios based on economic forecasts. Not the same as prediction markets, but useful if your underlying goal is to position around macro events. We compared both in our Wealthfront vs. Betterment review.
What Happens If You Use Polymarket From the US
Let's be practical. Thousands of US residents have used Polymarket, many without fully understanding the legal situation. Here's the realistic risk picture:
- The CFTC's enforcement action in 2022 targeted Polymarket, not individual users. There's no known case of a US retail user being prosecuted for trading on an offshore prediction market.
- That doesn't mean enforcement is impossible. The CFTC has broad authority and has gone after individuals in other derivatives contexts.
- Using a VPN to bypass geographic restrictions likely violates Polymarket's terms of service, meaning your account could be suspended and funds frozen.
- Tax reporting is still required for any winnings, regardless of where the platform is based. The IRS doesn't offer a carve-out for technically-illegal gambling activity.
The risk of individual enforcement is low but not zero. Whether that risk is acceptable is a personal decision we're not positioned to make for you.
Our Take
Prediction markets are genuinely useful. The information they aggregate is often more accurate than polls, expert forecasts, or media consensus. Restricting US access to the most liquid global platform in this space is a real cost to researchers, analysts, and traders alike.
But the law is what it is for now. For US residents who want to participate legally, Kalshi is the right answer. For everyone else, following the Polymarket data publicly is fine. Routing around the geo-block with a VPN is a personal choice that carries real, if modest, legal risk.
Watch the regulatory space carefully in 2026. If Congress moves on event contract legislation, or if the CFTC issues new guidance, the options for American traders could expand quickly. We'll update this piece as the rules change.