Prediction Markets Regulation: What’s Legal for Traders in the US, EU, and Global Crypto Platforms

Regulation decides whether you trade openly or through VPNs and offshore wallets. The landscape shifted dramatically with court rulings, CFTC approvals, and state-level battles.

Here is the straight talk on where things stand for major platforms and what it means for your access.

United States

Kalshi stands alone as fully CFTC-regulated and legal nationwide (state challenges largely defeated). Fiat deposits, KYC, tax reporting, the works. Safest for US persons.

Polymarket operates offshore, technically restricted US users via terms of service. Enforcement remains light, many access via VPN/wallet. Risk of future blocks or account freezes exists.

Worm.wtf and Augur live fully on-chain, no central entity to regulate. Pure crypto access, but US persons theoretically face commodity trading restrictions. Practical enforcement near zero.

European Union

MiCA framework classifies many event contracts as financial instruments. Platforms need licenses most lack. EU residents often blocked from Polymarket and Kalshi. Crypto-native options like Worm.wtf remain accessible via wallet.

Local regulated alternatives scarce.

Rest of World

Most jurisdictions treat prediction markets as gambling or unregulated derivatives. Crypto platforms widely available. Some countries (Canada provinces, Australia) impose restrictions similar to US.

Key Regulatory Wins and Risks

Kalshi court victories cemented event contracts as hedging tools, not gambling. CFTC self-certification speeds new markets.

Polymarket paid fines in past, shifted offshore. Future US re-entry possible via partnerships.

On-chain protocols like Worm.wtf and Augur sidestep regulation entirely, strength and weakness simultaneously.

What It Means for Traders

US citizens wanting zero risk: Kalshi only. Everyone else: full menu available, but understand platform terms and local laws.

Tax implications differ wildly. Regulated platforms report, crypto ones leave it to you.

Future Outlook

More regulated entrants likely. Crypto platforms may seek licenses or stay offshore. On-chain pureplays continue for censorship-resistant niche.

The space grows fastest where regulation clarifies rather than bans.

See platform specifics in our guides to What Is Kalshi?, What Is Polymarket?, and others. Latest updates in Prediction Markets.