Prediction Markets in California
If you’ve ever wanted to put your knowledge of real-world events to the test in a way that feels more like trading than betting, prediction markets might be exactly what you’re looking for. These platforms let users buy and sell shares tied to the outcomes of future events, ranging from inflation reports to political policy decisions.
In this guide, we’ll give you a thorough prediction markets definition, walking you through how they work, who regulates them, and which platforms are leading the way in California online gambling. We’ll also show you how to get started and answer some of the most common questions people have when they first hear about prediction markets.
Best prediction markets in CA
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What is a prediction market?
A prediction market is a platform where people can trade contracts based on the outcome of a specific future event. Think of it like a stock market, but instead of buying shares of a company, you’re buying “yes” or “no” positions on a question like, “Will the Federal Reserve raise interest rates next month?” or “What price will Bitcoin hit in 2025?” In most markets, contract prices roughly reflect the crowd’s implied probability of an outcome, updating in real time as new information emerges. At settlement, the contract pays out based on what actually happens, so your profit or loss comes from how accurately you anticipated the result relative to the market price.
Unlike CA sports betting or casino gambling, prediction markets are structured around trading probabilities, not wagering against a house with built-in odds or game mechanics. Prices are determined by the balance of supply and demand among participants, and users have the option to enter or exit positions at any time in prediction markets, meaning they’re more akin to financial markets than traditional gambling.
Prediction markets explained
Each contract trades between $0.01 and $0.99. If the outcome occurs, a “yes” contract pays out $1. If not, it pays $0. The price reflects the market’s estimate of the probability that the event will happen. These platforms offer a data-driven way to crowdsource beliefs about future events, and are used not only by traders but also by researchers, policymakers, and forecasters.
How do prediction markets work?
When comparing prediction markets vs betting or prediction markets vs trading, prediction markets operate on a straightforward buy-and-sell model that turns collective opinion into real-time probabilities. Instead of placing a one-time wager, participants trade contracts as prices move, allowing them to adjust positions before an event resolves and reflect changing information along the way.
Here’s a simple timeline to show how a prediction market operates:
- Market Opens
- Event: “What price will Bitcoin hit in 2025?”
- Buy a “Yes” Contract
- You buy in at $0.60
- Price Changes
- More buyers join; price climbs to $0.75
- Market Resolves
- If Bitcoin hits the selected price, you receive $1 for each contract.
This model enables you to act on your beliefs and potentially profit from them based on market movements. Outcomes are determined by clearly defined resolution rules and terms, making it essential to understand exactly how each market is settled before participating.
Who regulates prediction markets?
Prediction markets exist in a gray area between finance and speculation, making regulation a critical topic. In the US, prediction markets regulation is conducted on the federal level by the Commodity Futures Trading Commission (CFTC). It oversees event contracts when they’re classified as commodities or derivatives.
Key terms to know
- Commodity Futures Trading Commission (CFTC): Federal agency that regulates futures and event contracts; there are CFTC-registered exchange affiliates as well, such as Crypto.com | Derivatives North America (CDNA)
- Designated Contract Market (DCM): An exchange regulated by the CFTC where futures contracts can be traded (e.g., Kalshi, Polymarket, Crypto.com).
- Future Commission Merchant (FCM): An entity that can accept orders for trades on exchanges (e.g., Fanatics, Underdog).
- Introducing Broker (IB): A type of intermediary that can accept orders for trades (e.g., DraftKings).
- National Futures Association (NFA): The industry self-regulatory organization that licenses and monitors entities like DCMs, IBs, and FCMs.
- No-action letter: A form of conditional approval from the CFTC allowing platforms to operate.
- Self-certification: A process by which exchanges can launch contracts by asserting regulatory compliance rather than obtaining approval for new CFTC prediction markets.
Prediction markets are not licensed or regulated by the California Gambling Control Commission. That means they’re not considered gambling under state law. However, availability may still vary depending on the platform’s compliance status.
| Platform | Regulator | Sports Markets Allowed* | Available in CA? |
|---|---|---|---|
| FanDuel Predicts | CFTC (via CME Group) | ✅ | ✅ |
| Polymarket | CFTC-regulated Designated Contract Market (DCM) | ✅ | ✅ |
| ProphetX | CFTC | ✅ | ✅ |
| OG Predictions | CFTC | ✅ | ✅ |
| Kalshi | CFTC | ✅ | ✅ |
| Crypto.com | CFTC (via CDNA) | ✅ | ✅ |
| Gemini | CFTC-regulated Designated Contract Market (DCM) | ✅ | ✅ |
| Fanatics Markets | CFTC | ✅ | ✅ |
| Underdog | CFTC (via CDNA) | ✅ | ✅ |
*Some platforms either limit or omit sports markets in certain states, though all of those listed here currently offer sports markets in California.
Top prediction market platforms
Prediction markets are still an emerging space, so the best platforms and best prediction markets often depend on the types of events you want to trade, the importance of regulation to you, and your comfort level with different payment methods. Below is a closer look at the major prediction market platforms readers will encounter, with practical details on markets, fees, usability, and availability.
FanDuel Predicts
FanDuel Predicts is a standalone prediction market app developed by FanDuel in partnership with CME Group. It’s designed to introduce mainstream users to event contracts in a familiar, app-based environment. The site is not yet available in California, although it is expected to launch in December 2025.
- Available markets: Economic, political, and financial outcome contracts; sports event contracts are not offered in California
- Fee structure: Details are expected to be simple and clearly disclosed at launch
- App availability & UX: Dedicated mobile app with a streamlined, beginner-friendly layout similar to FanDuel’s core products
- Welcome bonus: $25 Bonus on Sign Up
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Polymarket
Polymarket is a crypto-based prediction market known for its wide-ranging and fast-moving global markets. The platform is popular internationally, although it is still relatively new in the US. Even so, the US version is rapidly expanding across more markets and adding additional features.
- Available markets: Global politics, culture, technology, economics, and breaking news events
- Fee structure: Fees are embedded in crypto transactions and on-chain activity rather than traditional trading commissions
- App availability & UX: Web-based platform that requires a crypto wallet; intuitive for crypto users but less beginner-friendly
- Welcome bonus: Deposit $20, Get $50 Trading Bonus*
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*18+ Only. Restrictions and eligibility requirements apply. Not available in all jurisdictions. Trading involves high risk and may result in loss of your entire investment. See polymarket.us/tos for more information. The Polymarket US App serves as an independent software provider and affiliate of Polymarket US and Polymarket Clearing, the CFTC-regulated derivatives exchange and clearing organization.
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ProphetX
ProphetX is a sports-focused prediction market platform where users buy and sell event contracts through a live order book rather than wagering against the house. It’s best suited for users who want tighter spreads and flexible pricing on major sports markets, with the ability to exit positions before settlement.
- Available markets: NFL, NBA, MLB, NHL, soccer, golf, MMA, and college sports; no politics, finance, or entertainment markets
- Fee structure: Exchange-style fees and payout adjustments may apply; no deposit or withdrawal fees
- App availability & UX: Available on iOS (4.8 stars) and Android (4.5 stars); clean, order-book interface with strong live trading functionality
- Welcome bonus: Trade $10, Get $20 in Trading Bonus
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OG Prediction Markets
OG Predictions is a newer entrant in the space, offering a sports-first prediction-trading experience that blends elements of traditional betting with event contract trading. The platform is designed to be highly accessible, with a clean interface and simplified pricing that appeals to newcomers exploring prediction markets for the first time.
- Available markets: Primarily sports event contracts (NBA, NFL, NHL, MLB, college sports), with some expansion into news and entertainment markets
- Fee structure: Pricing is built directly into contract costs and spreads, rather than charged as separate commissions
- App availability & UX: Web-based platform with a modern, intuitive interface that emphasizes ease of use and quick trade execution
- Welcome bonus: Trade $10, Get $10 in Bonuses
- OG Predictions promo code: Click to claim promo
Kalshi
Kalshi is currently the only federally regulated prediction market in the US, operating under the Commodity Futures Trading Commission (CFTC) ‘s approval. This prediction markets app is best suited for users who want legal, transparent event trading focused on real-world outcomes. It even offers sports prediction markets and event contracts for the NFL, NBA, NHL, MLB, and college basketball.
- Available markets: Inflation rates, Federal Reserve decisions, economic indicators, election prediction markets, news-driven outcomes, and sports
- Fee structure: Fees vary by contract and are disclosed before placing a trade; generally modest compared to traditional trading platforms
- App availability & UX: Available on web and mobile with a clean, order-book style interface that emphasizes clarity and pricing transparency
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Crypto.com
Crypto.com offers event-style contracts and forecasting products within its broader crypto ecosystem, though it is not a dedicated prediction market platform. In other words, at Crypto.com, you can buy and sell cryptocurrencies in the same app where you can trade positions in prediction markets.
- Available markets: Limited event-style products alongside crypto trading tools
- Fee structure: Fees are typically built into spreads and crypto transaction costs
- App availability & UX: Highly polished mobile app, though prediction-style products are secondary features
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Underdog
Underdog is a regulated prediction market platform launched by Underdog alongside its fantasy sports offerings. Unlike Underdog Fantasy contests, Underdog’s prediction markets allow users to trade event-based contracts tied to real-world outcomes, with a strong emphasis on sports-related questions and headline events.
- Available markets: Primarily sports-focused event contracts, with occasional non-sports markets tied to major news or cultural moments
- Fee structure: Pricing is embedded directly into contract costs rather than charged as explicit trading commissions
- App availability & UX: Mobile-first app with a streamlined interface that feels familiar to Underdog Fantasy users, though clearly separated from fantasy gameplay
- Welcome bonus: Play $5 in Fantasy Entries, Get $50 in Fantasy Bonus Entries (same as Fantasy product)*
*Underdog Predict is a registered FCM offering event contracts. Trades may be placed on CDNA, a registered DCM, powered by UDM Services, LLC. Trading involves significant risk and is not appropriate for all. Must be a U.S. resident. Terms apply: underdogpredict.com. Content is promotional and is not a recommendation to trade
How to get started with prediction markets
If you’re new to prediction markets, here’s how to begin:
- Choose a platform that’s legal and accessible in CA.
- Create an account and complete the Know Your Customer (KYC) identity verification process.
- Fund your account (if applicable) using secure payment options.
- Browse available markets and select one that interests you.
- Purchase a contract and monitor the market until resolution.
Start with small positions and focus on understanding how prices move before committing larger amounts. Some platforms even offer educational content and demo modes to help you get comfortable. And as with any market, only risk what you’re comfortable losing while you learn how the platform works.
List of prediction markets
The list of prediction markets available to trade on will vary by platform. Some sites may offer a larger variety of options than others. For example, most sites feature election prediction markets, but only some sites offer sports prediction markets. While the list below is by no means comprehensive, these are some of the prediction markets you’ll likely find available on platforms.
- Politics and Elections
- “Which party will win the U.S. Senate next year?” (Yes/No-style contract outcomes by date).
- Special election outcomes and other government-control questions.
- Economy and Macro (data releases + Fed)
- Inflation/CPI-style releases, jobs/unemployment-type outcomes, and Fed decision markets (often based on a specific official source and timestamp).
- Weather and Climate
- Temperature/snow/hurricane-style markets tied to defined locations and measurement sources.
- Sports (event “contracts,” not traditional odds)
- Game markets such as NBA spread contracts for specific matchups.
- Entertainment and Culture
- Awards-style markets (example: Oscar nominations questions).
How buying, selling & resolution work in prediction markets
Every prediction market revolves around yes-or-no event contracts. Here’s a simple breakdown of how you participate — and how your outcomes are determined:
Buying a contract
When you buy a contract, you’re choosing either “Yes” or “No” on a specific outcome.
- Each contract is priced between $0.01 and $0.99.
- The price reflects the market’s estimated probability of the event happening.
💰 Example:
If a “Yes” contract is priced at $0.63, that implies a 63% chance of the event occurring.
You can buy multiple contracts, and your total cost is simply the number of contracts × the price per contract.
🔑 Key Tip:
You’re not locked in — you can choose to sell your contract before resolution if the price changes and you want to take profit (or limit loss).
Selling a contract (optional)
You can sell your position any time before the market closes, as long as there’s liquidity (i.e., other users willing to buy).
- If the price goes up after you bought in, you can sell at a profit.
- If the price drops, you can sell to cut your losses before resolution.
💰 Example:
You buy a “Yes” contract at $0.60. A few days later, it rises to $0.80. You can sell and lock in a $0.20 profit per contract — without waiting for the outcome.
How resolution works
Once the event has occurred (or the deadline passes), the platform will resolve the contract based on a pre-determined source (e.g., government data, official results). This is where the market’s terms and conditions matter most: the contract only pays out if the platform’s specific resolution criteria are met, so it’s important to read and understand the market rules before you buy.
- If the event happens, “Yes” contracts pay $1, “No” contracts pay $0.
- If the event does not happen, “No” contracts pay $1, “Yes” contracts pay $0.
- Your profit is $1 minus your buy price, if you’re correct.
Platforms like Kalshi and FanDuel Predicts clearly outline their resolution source in each market, so be sure to read that before trading.
Things to keep in mind when buying and selling contracts
- You don’t need to hold until resolution — active traders often enter and exit based on price movements.
- Payouts are binary ($1 or $0), but profits can be made by selling early.
- Liquidity matters — markets with low trading volume can be harder to exit.
- Resolution criteria are fixed and public — double-check them to avoid surprises.
- Most platforms charge a small fee on profits — be sure to read each site’s fee structure.
FAQs About Prediction Markets
What’s the difference between prediction markets and gambling?
Prediction markets are trading platforms regulated by financial authorities (not gaming boards). They rely on market mechanics and are not classified as gambling under federal or CA law.
Are prediction markets legal in California?
Yes, some are. Kalshi and FanDuel Predicts (for non-sports contracts) are accessible in CA. Others, like Polymarket, are not available due to federal restrictions.
What is an event contract?
An event contract is a simple yes/no trade on the outcome of a future event. If the event happens, “yes” contracts pay $1; if not, they pay $0.
Can I lose money in prediction markets?
Yes. As with any form of trading, there is financial risk involved. Only trade what you can afford to lose.
How are prediction markets different from traditional investing?
Prediction markets focus on binary outcomes of real-world events, while traditional investing involves assets like stocks and bonds with long-term value.
Do I need to understand crypto to use prediction markets?
Not necessarily. Platforms like Kalshi and FanDuel Predicts use standard U.S. currency and traditional onboarding.
How are prediction market winnings taxed?
Winnings from prediction markets are generally considered taxable income by the IRS. If you make a profit by buying and selling event contracts — whether you hold them to resolution or sell them early — those gains may be treated similarly to capital gains or miscellaneous income, depending on the platform and your trading activity.
Most U.S.-regulated platforms, like Kalshi or FanDuel Predicts, will issue tax forms (such as Form 1099-B or 1099-MISC) if your earnings exceed reporting thresholds. You’ll need to report this income when filing your federal and (if applicable) state tax returns.
🔑 Key Tip:
Keep records of your trades, including buy/sell prices and dates, to make tax filing easier.
Final thoughts on prediction markets
Prediction markets offer an exciting way to engage with world events using a trading model rather than a betting model. While still an emerging space, platforms like Kalshi and FanDuel Predicts make it possible for California residents to explore legally while practicing responsible gambling techniques. As always, conduct thorough research and select a platform that aligns with your goals and risk tolerance.
Ready to get started? Dive deeper into the world of prediction markets today.
