It’s legal. It’s not legal. It may be legal? You can be forgiven if you’re not sure if Polymarket is legal in Texas, as there has been contradictory information muddying the waters. So, what’s the truth?
The truth is that Texas residents can indeed legally join this platform to trade event contracts on popular prediction markets. However, traders residing in this state need to join the US section of Polymarket, rather than the international side of the platform. This means fewer event contracts are available, but there are still nearly 1000 to choose from.
First things first – what is this platform? It’s a predictions market platform where users buy and sell binary event contracts based on their predicted outcome for an event. Prices for the contracts range from $0.01 to $0.99, based on the rough probability of an event outcome as determined by overall traders’ sentiment.
For example, a political question might be if Candidate A (65¢) or Candidate B (35¢) will win an election. Here, the overall market insight thinks that there is a roughly 65% chance that Candidate A will win. Traders purchase the contract at the price listed based on their predicted outcome. When the event ends, the contract settles at $1 for correct predictions. Meanwhile, traders who purchased the incorrect contract get $0. Users who are right get $1 for each contract they purchased, with their profit being $1 minus the price of the contract they purchased, and any minimal trading fees.
If someone purchased Candidate A for 65¢ and their prediction is correct, then they’ll get a 35¢ profit for each correct contract they purchased, minus any applicable fees.
Now that you know how it works, here’s an overview of some of the features of this site:
Yes, it’s legal for Texas residents to participate in prediction markets. If you’ve heard that Polymarket isn’t legal, that’s likely due to the following reasons:
So as you can see, some of this news has muddied the waters to the point where people aren’t sure if Polymarket is legal in Texas. Rest assured, it most certainly is legal.
Here’s a quick overview of what you need to know about using this trading platform:
📱 You’ll need to use the Polymarket app
Polymarket has both an Android and iOS app, and Texans will need to download and use one of these apps in order to use the Polymarket platform.
🌍 Prediction markets are restricted
There are more markets available on the international side of the Polymarket site as opposed to the US-based side of the site. However, Texas residents can still trade in nearly 1000 prediction markets, so there is still plenty of prediction trading action on the site. The main markets for US residents include sports, elections and politics, economics and finance, and pop culture.
💰 Profits are taxed differently
If you make correct predictions and generate a profit, you’ll need to report it on your taxes. The IRS usually views these funds as capital gains, but you’ll need to consult with a qualified tax professional so that you report and pay any tax accurately.
If you’re sitting in the great state of Texas wondering about whether you can trade event contracts on Polymarket, the answer is yes! The platform is federally regulated, so it’s open to all residents in the United States, except for any specific carveouts made by individual states. Right now, Texas doesn’t have any such restrictions. If you’re a legal resident of the US who is at least 18 years old, and you’re not a member of the military or other federal entity who’s trading on contracts for which you have inside knowledge, then you can sign up and join today.
To get started, go ahead and tap the Polymarket banner on this page. Any available welcome offer will be applied to your account automatically.