Is Polymarket legal in the US?

1 · What changed in December 2025

On December 2, 2025, Polymarket closed its acquisition of QCEX, a CFTC-registered Designated Contract Market. The deal — first announced in July 2025 for $112M — gave Polymarket a regulated on-ramp for US users. By Q1 2026 the company launched its US iOS app and web product, with US accounts trading the same event contracts as the rest of the world but settled through the CFTC-regulated entity.

This is a real, federally-regulated US exchange. The pre-2025 framing of “Polymarket is banned for US persons” is outdated — that applied to the offshore exchange before the CFTC pathway. The current US product is a different legal vehicle.

2 · State-level wrinkles

CFTC registration handles the federal layer. State law adds a second layer for products that look like “event wagering” or sports betting. The picture is fragmented:

• Allowed: most states allow CFTC-regulated event contracts as a federal product and do not separately gate them.
• Restricted or contested: a handful of states have actively challenged Kalshi’s and Polymarket’s right to offer sports-related event contracts specifically. The list has shifted multiple times — check the current list directly on each exchange’s state-availability page before opening an account.
• Geo-fenced products: even where the exchange is broadly allowed, individual contracts (especially sports) may be geo-restricted state by state.

3 · What this means for arbitrage

For cross-exchange arbitrage between Kalshi and Polymarket: both sides are now federally-regulated US exchanges. Opening accounts on both and trading the same event on each is a normal retail activity from the federal perspective. The structural pattern of buying YES on one side and NO on the other to capture a price discrepancy is mechanically the same as it ever was — just with the additional comfort that both legs settle through regulated venues.

State-level restrictions still apply contract-by-contract. Tellmarket only surfaces arbs where both venues actively list the contract for your IP region; we don’t override your state’s geo-restrictions and won’t show you something you can’t actually trade.

4 · Tax treatment, briefly

CFTC-regulated event contracts are generally treated as Section 1256 contracts for federal tax (60% long-term / 40% short-term capital gains, regardless of holding period), but treatment depends on the specific contract structure and is still being clarified by the IRS for prediction-market products. We’re not your tax advisor — track your fills (the dashboard helps), keep screenshots, and ask a CPA before filing.

5 · The honest summary

Polymarket is legal in the US for most users as of 2026, settled through a CFTC-regulated exchange that the company acquired in late 2025. State rules add a second layer that affects specific contracts (mostly sports). Cross-exchange arbitrage between Kalshi and Polymarket is a normal retail activity from the federal perspective. Check the exchange’s state-availability page before opening an account, and confirm tax treatment with a CPA.