New Legal Battles Could Reshape How Prediction Markets Operate in the US

A fast-moving fight over what counts as a permissible “event contract” in the United States is putting prediction markets back under the regulatory spotlight—and could change how platforms structure deposits, payouts, and even what topics can be traded. Two flashpoints stand out: the Commodity Futures Trading Commission’s (CFTC) 2023 rejection of political-control contracts on the regulated exchange Kalshi, and ongoing scrutiny of off-exchange operators that previously offered unregistered binary options to U.S. users.

What’s at stake is more than whether Americans can trade on elections. The outcome of these cases could dictate platform design choices—from minimum deposits and wagering windows to whether margin is permitted and how “parlay”-style combinations are presented—because each of these touches core questions about whether a product is a futures contract, gaming, or something else under federal law.

How to compare platforms while the rules evolve

For readers tracking which operators are compliant and how their features differ, Covers maintains a regularly updated list of marketplaces and key product characteristics. Its curated list of the top prediction market apps offers a side-by-side look at elements such as minimum deposit requirements, how odds are displayed, typical wagering periods, whether margin-style trading is available, the breadth of sports and event contracts on offer, and even dedicated parlay builders. That makes it a useful primer for understanding what users actually experience—and which features might be most sensitive to regulatory change.

Covers is cited here because it’s an established international sports portal focused on live scores, bookmaker comparisons, betting bonuses, statistics, and market education. Its page distills nuts-and-bolts items (like deposit thresholds and contract formats) that often get lost in legal headlines but matter to everyday users.

Where the law stands today

Under the Commodity Exchange Act, federally regulated exchanges can list event contracts, but the CFTC may prohibit contracts it finds “contrary to the public interest,” including those involving gaming or other restricted categories under 7 U.S.C. § 7a-2(c)(5)(C). That clause—and how it applies to elections—sits at the center of today’s disputes. See the statute text: 

• The CFTC in September 2023 rejected Kalshi’s self-certified contracts on which political party would control Congress, a proposal that drew heavy public comment and would have allowed per-person limits reportedly up to $25,000 per contract, according to Reuters.
• Separately, the CFTC has taken enforcement action against unregistered event-betting venues. In 2022, it ordered the blockchain-based platform Polymarket to cease offering certain event contracts to U.S. users and pay a civil penalty, underscoring that listing binary options without registering as a designated contract market (or otherwise fitting within an exemption) violates federal law. 

Key numbers to watch

• Contract caps: Regulated markets have proposed or used sharply different per-trader limits—PredictIt historically capped most markets at about $850 per trader, while Kalshi’s denied political-control contracts sought much higher limits (up to $25,000), per filings and reporting.
• Topic eligibility: The CEA’s “contrary to the public interest” test has already been used to exclude categories such as gaming. Whether federal elections are treated similarly on a lasting basis will determine the scale of permissible markets and potential liquidity.
• Platform features: Changes to controls around margin, parlay-style combinations, and wagering periods may be required if regulators conclude certain designs increase gaming-like risk or consumer harm. That, in turn, affects spreads, settlement windows, and how odds are displayed.

What operators may need to change next

• Product scope: Exchanges could emphasize macroeconomic, weather, and sports-adjacent data markets over political outcomes if election contracts face a categorical bar.
• Risk controls: Expect tighter per-market limits, clearer disclosures on settlement sources, and more standardized wagering periods to address manipulation and data-quality concerns.
• UX and tooling: Features highlighted on comparison pages—minimum deposits, whether margin-like leverage is offered, and parlay builders—may be refined to align with futures-style risk management rather than sportsbook-style presentation.

Why this matters for users

If courts ultimately narrow what counts as “contrary to the public interest,” regulated exchanges could roll out broader, higher-limit event markets with deeper liquidity. If not, platforms may continue to restrict contract types and keep per-trader caps low—especially on sensitive topics. Either way, the practical differences users care about—minimum deposits, odds formats, and how long a market stays open—are likely to shift as compliance teams align with the final rules.