Yes, Kalshi is legal in the United States. It operates as a federally regulated Designated Contract Market (DCM) under the oversight of the Commodity Futures Trading Commission (CFTC). This makes it the first and only legal event contract exchange for US residents.
Federal Regulation by the CFTC
Kalshi received CFTC approval in November 2020, granting it the authority to operate event contract markets. This regulatory status means:
- Federal oversight: Kalshi must comply with strict financial, operational, and reporting standards
- Legal certainty: US residents can trade without legal gray areas
- Consumer protections: Segregated funds, transparent pricing, and dispute resolution mechanisms
- Tax compliance: Kalshi provides 1099 forms and reports to the IRS
This distinguishes Kalshi from offshore platforms like Polymarket, which operate outside US jurisdiction and technically prohibit US users.
State-by-State Availability
Kalshi is available in most US states, but some states impose restrictions:
States Where Kalshi is Available
Kalshi operates in 47+ states and DC. If you're in a major state like California, Texas, New York, Florida, Illinois, Pennsylvania, Ohio, or Georgia, you can use Kalshi without restrictions.
States with Restrictions
A small number of states restrict or prohibit Kalshi:
- Nevada: Prohibited due to state gambling regulations
- Hawaii: Restricted under state law
- Check Kalshi's website: The official list is updated as regulations change
If you're unsure about your state, visit Kalshi's signup page — it will clearly indicate if your state is restricted during account creation.
Is Kalshi Legal in California?
Yes, Kalshi is fully legal in California. California residents can sign up, deposit funds, trade, and withdraw without restrictions. Kalshi's CFTC regulation supersedes state gambling laws because it operates as a commodity derivatives exchange, not a gambling platform.
Is Kalshi Legal in Texas?
Yes, Kalshi is legal in Texas. Texas has no specific prohibitions against CFTC-regulated prediction markets. Texas residents can use Kalshi for all available markets.
Is Kalshi Legal in Washington State?
Yes, Kalshi is legal in Washington State. Washington's gambling laws do not apply to federally regulated commodity exchanges, so Kalshi operates without restriction there.
How is Kalshi Legal When Betting is Restricted?
The key distinction is regulatory classification:
- Gambling: Regulated by state laws, often restricted or banned
- Commodity derivatives: Regulated by the CFTC under federal law, which preempts state gambling restrictions
Kalshi contracts are classified as commodity futures based on event outcomes, not as gambling. This legal framework is similar to how you can trade stock options or commodity futures legally, even in states that ban sports betting.
The CFTC specifically approved Kalshi's markets as being based on verifiable, non-manipulable events with economic utility — meeting the legal standard for commodity contracts rather than gambling.
Kalshi vs Offshore Platforms
Why Kalshi's legal status matters compared to alternatives:
| Platform | Legal Status for US Users | Regulatory Oversight |
|---|---|---|
| Kalshi | Fully legal, CFTC-approved | CFTC (US federal) |
| Polymarket | Blocks US users (offshore) | None (decentralized) |
| PredictIt | Academic exemption (limited) | CFTC no-action letter |
Using an offshore platform from the US carries legal risk, potential tax complications, and no regulatory recourse if something goes wrong. Kalshi offers legal certainty and consumer protection.
Age and Identity Requirements
To use Kalshi legally, you must:
- Be at least 18 years old
- Be a US resident in an eligible state
- Complete KYC verification (government-issued ID)
- Provide accurate personal information
These requirements are standard for CFTC-regulated platforms and ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations.
Tax and Legal Obligations
Because Kalshi is legal and regulated:
- Kalshi reports your activity: You'll receive a 1099 form for tax purposes
- Profits are taxable: Gains are treated as ordinary income or capital gains depending on holding period
- Losses are deductible: You can offset gains with losses, subject to IRS rules
- State taxes apply: Some states tax gambling/trading winnings; consult a tax professional
Offshore platforms don't provide 1099s, leaving you to track and report everything manually — and potentially exposing you to penalties for unreported income.
Bottom Line
Kalshi is fully legal for US residents in most states. It's the only CFTC-regulated prediction market platform, offering legal certainty, consumer protections, and proper tax reporting.
If you're in California, Texas, New York, or most other states, you can use Kalshi without legal concerns. Just verify your state's status on Kalshi's website during signup.