US Regulated Prediction Markets: Who's In, Who's Not, and Where the Lines Are Blurring

Ever tried to figure out where to actually put money on a Fed rate decision, and ended up with six different apps open with no idea which one is "the real one"? That's a fair reaction to have.

A year ago there was one clear answer: Kalshi, the CFTC-regulated exchange, plus a handful of brokerages that simply displayed Kalshi's own order book. That's no longer true. IBKR now bundles three separate exchanges into one account. Robinhood built its own. Gemini turned out to be a competitor, not a partner. DraftKings bought an exchange outright. FanDuel joined forces with CME Group. Polymarket, once entirely offshore, now runs a CFTC-regulated US product too.

Here's what actually changed, and what it means for where you should be looking.

Why Does "Regulated" Mean Something Specific Here?

A prediction market contract is a derivative. In the US, that puts it under the jurisdiction of the Commodity Futures Trading Commission (CFTC), the same federal regulator that oversees futures and options on commodities exchanges.

Federal CFTC oversight can preempt state-level restrictions. That's the legal argument every CFTC-registered exchange makes to justify offering event contracts nationwide, even in states where standalone sports betting is illegal or where state gaming regulators object.

Two federal licenses matter here. A Designated Contract Market (DCM) license lets an entity list and trade contracts. A Derivatives Clearing Organization (DCO) license lets it clear and settle those trades itself, instead of relying on someone else's clearinghouse. Holding both is what people mean by a fully regulated exchange.

Getting either license is slow and expensive. That's why, until recently, almost everyone who wanted into this market simply plugged into Kalshi's existing license rather than applying for their own. That has changed faster than almost anyone expected.

Why Does Everyone Still Connect to Kalshi?

Kalshi was the original CFTC-regulated exchange built from the ground up for event contracts: elections, economic data, weather, and increasingly sports outcomes. A Yes contract on Kalshi pays $1 if the event happens and $0 if it doesn't.

The two sides of a binary market sum to roughly $1.00 before fees. That's the basic arithmetic behind how these contracts price probability.

You can open a Kalshi account directly with a bank transfer. No crypto wallet is required, which is part of why it was easy for brokerages to plug Kalshi's order book into their own apps in the first place.

Kalshi's regulatory footing is more contested right now than at any point since it launched, though. More on that below.

How Does IBKR Let You Trade Prediction Markets Inside a Brokerage You Already Trust?

Interactive Brokers (IBKR) is a full-service brokerage best known for options, futures, and international equities trading. Its Prediction Markets platform bundles three separate CFTC-regulated venues into one account: Kalshi, CME Group, and ForecastEx.

ForecastEx isn't a neutral third party. It's majority-owned by IBG LLC, the same parent company behind Interactive Brokers Group, and the CFTC designated it as its own DCM and DCO back in 2024. So IBKR isn't just distributing someone else's exchange. It also owns one.

That matters for how you should think about the offering. A trader who already holds a margin account, an options position, and a few ETFs can add an election contract or a CPI contract without opening a new app or moving money to a new custodian. IBKR charges no commission on these trades and pays an interest-like yield, currently around 3.14% APY, on funds tied up in open positions.

Is Robinhood Just Reselling Kalshi's Markets, or Building Its Own?

Robinhood built its retail trading business on making things feel frictionless, and it applied that same logic to event contracts by offering Kalshi's markets directly inside its app. For a while, that's all it was: Robinhood acted as the futures commission merchant, while Kalshi, and later ForecastEx, handled the actual listing and clearing.

That changed in November 2025. Robinhood announced Rothera, a joint venture with Susquehanna International Group, built on the acquired license of MIAXdx, a CFTC-licensed derivatives exchange. Rothera launched in June 2026 and is now a fully licensed exchange and clearinghouse in its own right.

Robinhood's own leadership has said most of its prediction-market order flow is moving to Rothera over time. In September 2026, Robinhood also began routing a selection of football contracts through a different venue entirely, Crypto.com's CFTC-regulated OG Prediction Markets exchange, as part of a deal in which Robinhood took an equity stake in Crypto.com.

So Robinhood's event contracts today can be cleared through Kalshi, ForecastEx, its own Rothera exchange, or OG Prediction Markets, depending on the specific contract. The app looks the same either way. What's underneath it doesn't.

Is Gemini a Kalshi Partner or a Competitor?

The crypto exchange founded by Cameron and Tyler Winklevoss turns out to be a competitor to Kalshi, not a distributor of its markets. Gemini spent years building its own regulatory stack instead of renting one.

The CFTC designated Gemini Titan, LLC as a Designated Contract Market in December 2025, letting Gemini launch its own predictions marketplace that same month. In April 2026, a second Gemini affiliate, Gemini Olympus, LLC, won a Derivatives Clearing Organization license, giving Gemini the ability to clear and settle its own trades in-house.

That combination, an owned DCM plus an owned DCO, makes Gemini a vertically integrated, full-stack competitor to Kalshi and Polymarket rather than a reseller of either. Gemini has since started wholesaling access to its own markets to other brokerages through a partnership with Apex Fintech Solutions, the same kind of distribution model Kalshi itself has relied on.

For a trader who already holds Bitcoin or Ether on Gemini, adding a position on a Fed decision or a sports outcome is still a smaller step than starting from a traditional brokerage. That overlap with crypto-native users remains Gemini's core advantage. The difference is that Gemini now owns the pipes end to end.

How Are DraftKings and FanDuel Entering From the Sportsbook Side?

DraftKings and FanDuel are the two largest sports betting operators in the US, and they've taken two different paths into the same space.

DraftKings acquired Railbird Technologies, a CFTC-registered DCM, in late 2025. That gave DraftKings its own exchange license instead of a partnership with someone else's. It launched DKeX, its proprietary exchange, in June 2026, folded into the existing DraftKings Sports & Casino app under the DraftKings Predictions brand. It's live in 38 states. Railbird has already filed its first batch of sports-linked contract templates with the CFTC, covering game winners, spreads, player props, and team or player performance benchmarks.

FanDuel took the joint-venture route instead. FanDuel Predicts is a partnership between FanDuel's parent Flutter and CME Group, with contracts listed on CME Group's own derivatives exchanges. It launched in five states, Alabama, Alaska, South Carolina, North Dakota, and South Dakota, in December 2025, then expanded through early 2026. Financial contracts on benchmarks like the S&P 500, GDP, and CPI are now available in all 50 states. Sports contracts are offered specifically in states where traditional sports betting isn't legal, apart from tribal land. In June 2026, FanDuel Predicts expanded again by adding contracts through Crypto.com's OG Prediction Markets exchange.

Both companies are doing something structurally different from IBKR, Robinhood, or Gemini. Those three are bolting event contracts onto a trading or investing product. DraftKings and FanDuel are bolting them onto a betting product, for an audience that already thinks in odds, parlays, and same-game props. The regulatory framing is exactly why that audience matters to them: event contracts under CFTC oversight are a second, federally governed lane into markets that state sports betting licenses can't always reach.

Why Are Courts Split on Whether Any of This Is Even Legal?

This is the part that makes "regulated" a moving target rather than a fixed label. Several state gaming regulators argue that sports-linked event contracts are just sports betting wearing a different label, and that they should require the same state licenses as any sportsbook. Kalshi and the CFTC argue federal law preempts that entirely.

Two federal appeals courts have now ruled on this exact question, and they disagree. In April 2026, the Third Circuit sided with Kalshi, affirming an injunction that blocks New Jersey from enforcing its gambling laws against Kalshi's sports contracts. In August 2026, the Ninth Circuit went the other way, upholding Nevada's authority to regulate Kalshi's sports-related contracts under state law.

That's a confirmed circuit split on a question that determines whether an exchange can legally operate nationwide. By industry counts, at least a dozen states are now in some form of active legal conflict with Kalshi and/or Polymarket, through lawsuits, cease-and-desist orders, or outright bans. The CFTC has gone on offense too, suing states including Minnesota, Connecticut, Arizona, and Illinois over their attempts to restrict prediction markets. For the fuller state-by-state breakdown of how this fight has unfolded, see our CFTC vs. states explainer.

This fight is almost entirely about sports contracts specifically. It doesn't touch the financial and economic contracts, elections, CPI, Fed decisions, in the same way, but sports is exactly the category DraftKings, FanDuel, and Kalshi's own sports expansion all depend on.

Where Does Polymarket Fit Into a "Regulated" Conversation?

Polymarket spent years as the largest prediction market platform not available to US retail users, run entirely offshore and funded in crypto (USDC). That changed in 2025.

Polymarket acquired QCEX, a CFTC-licensed exchange and clearinghouse, for $112 million, creating QCX LLC as its US-facing Designated Contract Market. The CFTC granted Polymarket an Amended Order of Designation in November 2025, and Polymarket US launched that same month as an invite-only product before opening more broadly through 2026.

That makes Polymarket a two-track operation now. Its original international exchange stays crypto-funded and geoblocked for US users. Polymarket US, cleared through QCX LLC, sits in the same regulated category as Kalshi. Funding details for the Polymarket US product specifically aren't fully public yet, so that's worth treating as an open question rather than a settled fact. If you're weighing whether to use Polymarket in the US specifically, that guide walks through the current setup.

How Do These Regulated Platforms Compare Side by Side?

None of the platforms below show you the full picture on their own, because each one only shows its own book, or in some cases, someone else's book wearing its own brand. PredictionHero pulls data across these platforms so a market on the same event can be compared side by side, rather than checked one app at a time.

Kalshi is still the platform every other trading and investing app chose to connect to first. It's no longer the only regulated option, though, and several of the companies that started out as its distributors have since built exchanges of their own.

So Where Should You Actually Trade?

If you already have a brokerage account and think about event contracts as another line item in a portfolio, IBKR is the path of least friction, and it now spans three separate exchanges without you needing to pick one.

If you want the simplest mobile experience, Robinhood still covers that, even though what's clearing your trade behind the scenes has gotten more complicated.

If you're already holding crypto and want event contracts in the same place, Gemini is a more serious option than it looks at first glance. It isn't renting someone else's exchange. It built its own.

If you think in sportsbook terms, odds boards and same-game combinations, DraftKings and FanDuel are each building toward that, just through different regulatory routes.

None of these are neutral on price. Each one shows you its own book, or a book it happens to be plugged into. That's the gap an aggregator closes: compare the same event across Polymarket, Kalshi, and the apps built on top of them, before deciding where to look.

Sources

• CFTC: ForecastEx, LLC DCO Registration and DCM Designation
• Interactive Brokers Bundles Kalshi, CME, ForecastEx
• Robinhood: Prediction Markets Joint Venture (Rothera)
• Robinhood expands prediction markets in Crypto.com deal, Axios
• Gemini Receives DCO License Approval From CFTC
• DraftKings launches in-house prediction market exchange DKeX
• FanDuel and CME Group Launch FanDuel Predicts
• FanDuel Predicts expands via Crypto.com / OG Prediction Markets
• Third Circuit ruling on CFTC jurisdiction, Holland & Knight
• Ninth Circuit upholds state and tribal authority, Holland & Knight
• Kalshi Lawsuit Tracker 2026, XCLSV
• Polymarket Acquires QCEX for $112 Million
• CFTC Approval Allows Polymarket to Reenter the U.S. Market

PredictionHero aggregates publicly available prediction market data for informational purposes only. This is not financial advice. Prediction markets may not be available in all jurisdictions.