More US states have put limits on prediction markets like Kalshi

Corrections and clarifications: This story has been updated to add new information and clarify the distinction between state-level election betting laws and prediction market regulations.

U.S. states are making moves to put a damper on markets that allow citizens to make bets on election outcomes, according to a new Pew Research analysis.

A June Pew review of data from the National Conference of State Legislatures found that legislators are increasingly making moves to regulate "prediction markets" – platforms that allow people to buy and trade "contracts" based on the predicted outcome of a future event, from sports games to the outcome of a war.

Prediction market platforms like Kalshi and Polymarket have rapidly proliferated across the United States in recent years, drawing the attention of economists, casual investors and lawmakers alike. Proponents say it's a new way for people to direct money without relying on "the house" or self-interested "experts" for odds or opinions. Detractors, in a series of lawsuits, have expressed concerns about risk, a lack of regulation and the behavioral impact of betting on real-world events. Chief among these concerns are those around election betting, which was newly made legal federally in 2024. Before that, the U.S. Commodity Futures Trading Commission (CFTC) had denied requests to open up elections to betting.

Pew's analysis shows that since then, multiple U.S. states have made some sort of move to regulate the practice. Many already had or have election betting rules on the books, independent of attempts to regulate prediction markets. Here's what to know about yours.

States with rules on election betting

Nearly half of all U.S. states have outright bans on election betting, while an additional nine have some sort of law banning or regulating it under certain circumstances, according to Pew's analysis.

Only 18 states and Washington, DC, do not have any specific election betting laws, though some have broader regulations that could apply. Idaho, for example, has a 1887 statute that already makes election betting a misdemeanor.

States with circumstantial regulations, like Oregon and South Dakota, have rules about who can participate; candidates running for office are prohibited from wagering on their own races, for example. Other states make distinctions between felony and misdemeanor violations based on things like how much money was involved.

States that have full-blown bans handle deterrents and punishments in different ways. Iowa, Massachusetts, Pennsylvania and Rhode Island penalize the people who make and run election-betting operations, but not those who participate. Delaware and New York, on the other hand, can take your right to vote away if you are convicted of partaking in election betting.

States that have proposed laws on prediction markets

As legislation tries to get a handle on a surging predictions market that extends far beyond election betting, lawmakers have proposed a variety of bills, from banning services like Polymarket altogether to placing age restrictions or tax levies on the platforms.

Some attempts to regulate the market on the state level have been complicated by the federal government, which has taken the stance that, because people are trading or "swapping" financial products, not placing bets or gambling, prediction markets are subject to federal regulation and exempt from state gambling laws.

The CFTC has sued several states to try to stop them from regulating prediction markets.

Minnesota became the first state to ban Kalshi, Polymarket and similar platforms outright in May, with a few exceptions (trading based on weather prediction, anyone?), making creating, operating, managing, facilitating, advertising, or marketing prediction markets a felony. The CFTC filed a lawsuit to stop the law from being enacted, calling it a "flagrant and unprecedented incursion into the Commission’s exclusive regulatory sphere."