Prediction Markets

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Turn real world events into tradable opportunities.

What are Prediction Markets?

With the November 3 midterm elections about five weeks away, traders have been putting real money on which party will win the House and Senate, and the odds from those trades have become a regular part of election coverage. The same kind of market lets people trade on Federal Reserve decisions, NFL games, and the price of bitcoin, and understanding how it works helps you make sense of the odds in the headlines and see exactly what you could win or lose before putting in a dollar.

How Prediction Market Odds and Prices Work?

When the Federal Reserve raised interest rates on September 16 for the first time since 2023, almost no one trading on the decision was surprised. In early September, prediction market contracts on a September hike traded near 50 cents, and after a strong jobs report and hot inflation data, the same contracts cost close to 90 cents by decision day. Those prices were the crowd's running forecast, and knowing how to read them tells you both what traders expect and exactly what a trade would cost you and pay you.

Can Prediction Markets Be Manipulated?

In February 2026, former Congressman George Santos bet on whether he would attend the State of the Union, then posted about his plans on social media while money rode on the answer. Federal regulators later found those posts were misleading and that the contract's price moved in his favor after he made them. With the November midterms already being called the first prediction-market election, knowing how these markets get gamed matters to anyone who trades them or simply reads their odds in the news.

How Do Prediction Markets Make Money?

With the NFL season underway and the midterm elections a few weeks out, prediction markets are handling more trading than ever, as people buy yes-or-no contracts on who will win Sunday's games and November's Senate races. The companies running those markets never pick a winner themselves, which raises a fair question about where their money comes from. The answer matters to you because it determines what each trade costs and whether the platform benefits when you lose.

Are Prediction Markets Regulated?

Three federal appeals courts have now weighed in on whether states can police sports contracts on prediction markets, and on Sept. 25 the latest one sided with Ohio and Tennessee over the industry. With the midterm elections weeks away and money flowing into contracts on everything from Senate races to Sunday's football games, it pays to know who oversees these platforms, and what that oversight does and does not protect, before you put a dollar in.

Are Prediction Markets Legal in the US?

If you have seen a question like whether a team will win Sunday's game or whether interest rates will fall next month listed with a price like 62 cents, you have seen a prediction market at work. These markets have grown fast, and since late August 2026, two federal appeals courts have ruled that states can treat their sports contracts as gambling, pushing the question of whether they are legal toward the Supreme Court. If you are thinking about trading on one, the answer shapes which markets you can access and how much protection you get.

Do You Pay Taxes on Prediction Market Winnings?

If you paid 40 cents for a Yes contract on your team winning Sunday's game and it settled at $1, you earned a 150% return in a single afternoon. With football season underway and event contracts now offered by regulated exchanges nationwide, more first-time traders are collecting payouts like that and wondering what they owe. The answer affects more than your refund: it decides whether your losses count and whether breaking even can still leave you with a tax bill.

Are Prediction Markets Gambling?

On September 25, 2026, a federal appeals court ruled that Ohio and Tennessee can apply their gambling laws to sports contracts on a federally regulated prediction market. It was the second appeals court in two months to side with the states, and it moved a question many new traders are asking one step closer to the Supreme Court. The answer shapes how old you have to be to trade, what consumer protections apply, and even how your winnings may be taxed.

Prediction Markets vs. Sports Betting

If you have watched an NFL game this season, you have probably seen ads for two ways to put money on the result: a sportsbook, and an app that calls the same wager a trade. The line between the two is now being fought over in court, after a federal appeals court ruled on Sept. 25, 2026, that Ohio and Tennessee can regulate sports prediction contracts under their gambling laws. Knowing how each one works tells you what you are really paying, how much control you have once your money is in, and whether the option is even legal where you live.