Who regulates event contracts: the CFTC and New York
The CFTC registers the exchanges and clearing houses behind Kalshi, Polymarket US, OG and ProphetX. New York claims a role too. Here is who does what.
We earn a commission if you sign up through these offers. 21+.
Kalshi: Trade $25 and Get $25!
NYPREDICTSCertain limitations apply. The offer is available to new users only, subject to the terms and conditions at kalshi.com/tc/500. 18+ only. Restrictions and eligibility requirements apply. Event contract trading involves significant risk and is not appropriate for everyone. Please carefully consider if it is appropriate for you in light of your personal financial circumstances. Kalshi products are not available in all jurisdictions. See kalshi.com/regulatory for more information.
The short answer
Event contracts traded on a U.S. exchange are federal derivatives. The Commodity Futures Trading Commission (CFTC) registers the exchanges that list them and the clearing houses that settle them. New York argues that contracts on sports and other events are also gambling under state law; that dispute is in court. Kalshi (opens in a new tab) and Polymarket US (opens in a new tab) are Available, dispute pending (as of October 13, 2026) in New York, and no court order blocks them.
We earn a commission if you sign up through these offers. 21+.
Kalshi: Trade $25 and Get $25!
NYPREDICTSCertain limitations apply. The offer is available to new users only, subject to the terms and conditions at kalshi.com/tc/500. 18+ only. Restrictions and eligibility requirements apply. Event contract trading involves significant risk and is not appropriate for everyone. Please carefully consider if it is appropriate for you in light of your personal financial circumstances. Kalshi products are not available in all jurisdictions. See kalshi.com/regulatory for more information.
Last checked November 2, 2026
What is an event contract, legally?
An event contract pays a fixed amount, usually $1, if a defined event happens and nothing if it does not. When it trades on a registered U.S. exchange, it is treated as a derivative under the Commodity Exchange Act, the law the CFTC administers. On October 9, 2026 the CFTC issued an interim final rule stating that sportsbook and casino wagers are not “swaps”, and proposed a separate rule that would define contracts on sports, politics, culture and weather as swaps. The interim rule takes effect when it is published in the Federal Register.
Who runs the exchanges, and who settles the trades?
Each platform you see in an app is backed by a legal entity that the CFTC registers. The exchange is the designated contract market (DCM); a derivatives clearing organization (DCO) settles the trades.
| Platform | Exchange (DCM) | Clearing |
|---|---|---|
| Kalshi | KalshiEX LLC, designated November 3, 2020 | Kalshi’s clearing arrangements are set out in its exchange rulebook |
| Polymarket US | QCX LLC d/b/a Polymarket US, contract market since July 9, 2025 | QC Clearing LLC d/b/a Polymarket Clearing, registered December 16, 2024 |
| OG | North American Derivatives Exchange, Inc. (Nadex), doing business as OG.com Prediction Markets | Nadex is also the clearing organization |
| ProphetX | ProphetX LLC, designated June 11, 2026 | Registered as a clearing organization on June 10, 2026 |
The Polymarket US app is an independent software provider and affiliate of Polymarket US and Polymarket Clearing. Check the CFTC’s public register before you rely on any platform’s description of itself.
Partner sign-up links: Kalshi (opens in a new tab), Polymarket US (opens in a new tab), OG (opens in a new tab) and ProphetX (opens in a new tab).
Why does the CFTC say it is the only regulator?
On April 24, 2026 the CFTC sued New York in federal court in Manhattan, asking for a declaration that federal law gives it exclusive authority over event contracts on registered exchanges and an order stopping the state from enforcing laws it says are preempted. On August 11, 2026 it used its emergency authority to order Kalshi to keep operating as an exchange while New York’s own lawsuit continues.
Where does New York claim a role?
New York says contracts on sports and other events are gambling that needs a state license. It sued Kalshi on July 31, 2026 and Polymarket US on September 24, 2026. On July 7, 2026 a federal judge in Manhattan denied Kalshi’s request for a preliminary injunction, finding that state gambling law can apply to sports contracts; that is a preliminary ruling, not a final judgment. No court order blocks Kalshi or Polymarket US in New York: both are Available, dispute pending (as of October 13, 2026).
What does this mean for an account holder?
- Your account is with a registered exchange, or with the broker named in the platform’s terms. Read who that is before you deposit.
- Each contract settles under the rules the exchange has filed: the event definition, the source that decides the result and what happens in unusual cases.
- Fees are set by each exchange and shown on the order preview. Kalshi charges 0.07 × contracts × price × (1 − price) per executed trade, rounded up; Polymarket US charges orders that fill straight away 0.0695 × contracts × price × (1 − price).
- The legal dispute can change what is offered in New York. Check the platform’s current eligibility rules, and never use a workaround to get around a restriction.
- Trading event contracts is risky: you can lose the whole amount you pay for a contract, plus fees.
For the order-by-order mechanics, read how to read a contract and what a trade really costs.
Sources
- CFTC register of designated contract markets (opens in a new tab)
- CFTC release 9309-26: interim final rule, October 9, 2026 (opens in a new tab)
- CFTC release 9310-26: proposed rule on event contracts, October 9, 2026 (opens in a new tab)
- CFTC release 9218-26: CFTC sues New York, April 24, 2026 (opens in a new tab)
- CFTC release 9281-26: emergency order, August 11, 2026 (opens in a new tab)
- New York AG: Polymarket lawsuit, September 24, 2026 (opens in a new tab)
- Sports Betting Dime: New York judge denies Kalshi motion for preliminary injunction (July 7, 2026) (opens in a new tab)
Frequently asked questions
Who regulates prediction markets in the US?
The CFTC registers the exchanges (designated contract markets) and clearing houses that list and settle event contracts. Some states, including New York, argue that contracts on sports and other events are also subject to state gambling law; courts have not settled that question.
Is Kalshi regulated?
Yes. KalshiEX LLC is a CFTC-designated contract market, designated on November 3, 2020.
Who runs Polymarket US?
QCX LLC, doing business as Polymarket US, is the CFTC-registered exchange. Trades are cleared by QC Clearing LLC, doing business as Polymarket Clearing.
Are Kalshi and Polymarket US available in New York?
Kalshi and Polymarket US are Available, dispute pending (as of October 13, 2026) in New York. The state sued Kalshi on July 31, 2026 and Polymarket US on September 24, 2026; no court order blocks them.
What did the CFTC change on October 9, 2026?
It issued an interim final rule stating that sportsbook and casino wagers are not swaps, effective on publication in the Federal Register, and proposed a rule that would define contracts on sports, politics, culture and weather as swaps.
21+ · T&Cs apply · Terms
Certain limitations apply. The offer is available to new users only, subject to the terms and conditions at kalshi.com/tc/500. 18+ only. Restrictions and eligibility requirements apply. Event contract trading involves significant risk and is not appropriate for everyone. Please carefully consider if it is appropriate for you in light of your personal financial circumstances. Kalshi products are not available in all jurisdictions. See kalshi.com/regulatory for more information.
