You may have heard about some of the legal hoopla surrounding prediction markets. It’s no wonder that so many people are wondering, is Polymarket legal in California? The answer is yes, it is – but that requires some explanation.
If you’re feeling confused or unsure about any of this, then you’re reading the right article. In just moments we’ll take a look at the recent history of Polymarket in the U.S., how California residents were shut out of Polymarket prediction markets for some time, and what changed to make it legal again. Read on for the details below.
Facts
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What is Polymarket?
Before we talk about whether Polymarket is legal in California, let’s take a quick look at what this platform is all about. This is a prediction market platform, where users purchase event contracts based on whether they think a particular event will happen. Contracts are priced between $0.01 and $0.99, depending on what the consensus is among traders.
For example, an event contract might ask users if they think the Spurs or the Knicks will win a basketball game, and the contract prices might be Knicks 60¢ and Spurs ¢40, which roughly equates to the market sentiment that there’s a 60% probability that the Knicks will win, according to the group wisdom. Traders purchase either contract for the price listed.
If the prediction is incorrect, traders get $0 when the contract settles. If the prediction is correct, the contract settles at $1. The profit is $1 minus the price of the contract at the time they purchased it, and minus fees as well. So, a trader who purchased a contract for 30¢ and is correct will get a 70¢ profit for each correct contract they purchased, minus the fees (which vary depending on the market and whether you’re adding or subtracting liquidity in the market).
Is Polymarket legal in California?
The short answer is that yes, it is legal.
The long answer is that there are some restrictions in place. You see, the international Polymarket platform isn’t available to California residents, where people can purchase event contracts across a wide variety of prediction markets. Instead, Polymarket in California has a much shorter leash, as residents can participate in a much smaller subset of prediction markets than are available to international users.
This is the same for users in other states as well. For example, those who are wondering if Polymarket is legal in Texas will find that the answer is yes, but only if they’re using the part of the site that’s set up for US citizens.
What prediction markets are legal on Polymarket for California residents?
As mentioned, the US version of Polymarket is restricted as compared to the international version. Speaking generally, here are the types of markets in which US residents can participate:
🏅 Sports
This is a significant part of what’s offered in the US, as users can make predictions about team and player outcomes across a wide variety of sports.
🗳️ Politics/Elections
This is one of the bigger markets on the platform, and it includes submarkets such as primaries, general elections, state elections, international elections, legislation, and more.
🎭 Culture/Entertainment
Here users can predict events such as awards, celebrity events, and other pop-culture events.
💰 Economics/Finance
This includes inflation, economic indicators, interest rates, crypto predictions, and more.
*It’s worth noting here that participating in sports prediction markets is legal. This is similar to other states. For example, Polymarket is legal in Washington state.
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How is Polymarket legal in California and elsewhere?
Prediction markets are legal because they’re regulated by the federal government’s CFTC (Commodities Futures Trading Commission). What confuses many people is that they heard that the CFTC settled with Polymarket in 2022, and the platform then blocked US users. That’s true, but recently the platform acquired a CFTC-regulated exchange and gained federal approval, which opened the door to US residents.
However, there is some jostling between the federal government and the states. For example, the CA government banned government officials from engaging in prediction markets, especially in places where they have insider information (such as political events). The upshot is that if you don’t work in the government, then it’s legal for you to use the platform. The same thing is happening elsewhere. For example, Polymarket is legal in New York, but the state legislature may carve out some exceptions.
Here’s an overview of the legal issues:
| Polymarket feature | Details |
| Legal in the US? | Yes, through Polymarket US, which is separate from the international side of the platform. |
| Regulatory oversight | CFTC (Commodities and Futures Trading Commission). |
| Legal framework | Event contracts are treated as derivatives. |
| Currency | USD |
| Access restrictions | Users must complete the KYC identity verification process. |
Pros and cons of using Polymarket in California
Pros and Cons - Polymarket is a large platform with deep liquidity.
- The platform is regulated by the federal government (CFTC).
- It’s 100% legal for CA residents to trade event contracts.
- More market restrictions for US prediction trading.
Final thoughts on Polymarket’s legality in California
As you just discovered, this brand is regulated by the federal government of the United States. Indeed, the current administration has asserted that the federal government will retain control over the legality, which means that California residents – and most everyone else in the US – can continue to participate in prediction markets on the part of the platform that’s been created specifically for US residents.
To get started, all you have to do is tap the Polymarket banner on this page. If there is a welcome offer currently available to you, you’ll learn about it on the banner.
Polymarket in California FAQ
- 🖐️ What if the legality changes in CA after you sign up?
Polymarket will close or suspend any affected accounts, and users will get any funds owed to them.
- 🌍 Do people who use Polymarket in California need to verify their identity?
Yes. By law, everyone who uses this prediction market platform will need to verify their identity by uploading a government-issued identification, a selfie, and documents such as a utility bill. This is the same everywhere. For example, Polymarket is legal in Florida, and part of the platform’s compliance with federal law is to seek identity verification.
- ⚖️ How is Polymarket regulated?
It’s regulated by the federal government as a DCM (Designated Contract Market), with prediction markets categorized as commodities/derivatives.