Prediction Markets in New Jersey: How Event Contracts Work
Learn how prediction markets turn future events into tradable Yes and No contracts, how prices become implied probabilities, which major platforms operate in the United States, how Kalshi and Polymarket differ, and why licensed New Jersey sportsbooks still hold the edge for conventional sports betting.
Prediction Markets Explained
What Is a Prediction Market?
Prediction markets are exchanges where participants buy and sell contracts tied to future events. Federally regulated platforms commonly call these products event contracts, prediction contracts, or information contracts.
Most contracts settle around a clearly written question. Traders choose an outcome, often Yes or No, and the contract price moves as buyers and sellers react to news, data, injuries, elections, economic reports, team decisions, weather forecasts, and other information.
Prediction-market shares aren't ownership shares in a company, league, or sports team. Their value depends on whether the event resolves according to the contract's published rules.
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Event Contract Basics
How Prediction Markets Work
Each market begins with a precise question, a deadline, settlement rules, approved information sources, and one or more possible outcomes. Prices change as traders submit bids and offers through the exchange.
Choose an Outcome
Binary markets usually offer Yes and No. Multi-outcome markets may list several candidates, teams, price ranges, destinations, or possible decisions.
Read Price as Probability
Yes trading at 45¢ suggests a market-implied probability near 45%. Prices are signals created by current orders and completed trades, not guarantees.
Hold or Sell
Winning contracts normally settle at $1 and losing contracts at $0. Traders can often sell before resolution when sufficient buyers and liquidity are available.
Order Books, Bids, Asks, and Spreads
Prediction exchanges generally use order books. Bids show what buyers are willing to pay, while asks show what sellers will accept. The difference between the leading bid and ask is the spread.
Deep markets usually have tighter spreads and larger available quantities. Thin markets may produce partial fills, unfilled orders, price movement, or difficulty exiting a large position at the displayed price.
- Market orders seek an immediate fill at available prices.
- Limit orders set the maximum buying price or minimum selling price.
- Trading fees vary by platform, market category, order type, and contract price.
- Resolution depends on the exact rules and approved information sources.
Prediction Prices Aren't Guaranteed Probabilities
Market prices are often interpreted as probabilities because a 45¢ contract pays $1 when correct. Still, prices can reflect low liquidity, wide spreads, trader concentration, breaking news, execution costs, and temporary imbalances.
Use the market as one information source, then compare the contract rules, available data, news, research, and competing prices before trading. More volume can improve price discovery, but volume alone doesn't guarantee accuracy or profit.
- Prices change whenever new orders or information reach the market.
- Implied probability isn't the same as certainty.
- Contract wording matters as much as the headline question.
- Fees and spreads affect the real return.
Worked Example
Buying 100 Yes Contracts at 45¢
Suppose Yes costs 45¢ and you buy 100 contracts. The example below excludes fees and assumes the market resolves normally.
Selling those 100 contracts at 65¢ before resolution would produce $65 in sale value and a $20 gross trading profit before applicable fees.
Prediction Market Payout Calculator
Enter the contract price, investment, and expected early-sale price to estimate contracts purchased, settlement value, and early-sale return.
Estimates exclude platform fees, bid-ask spreads, taxes, slippage, partial fills, and contract-specific adjustments. Trading can result in the loss of the full amount committed.
Affiliate Disclosure: NJ Gaming Report may earn a commission when a reader registers through an affiliate link. This doesn't increase the reader's cost or change our editorial opinion.
Sports Beyond the Box Score
Prediction Markets Can Ask Sports Questions That Sportsbooks Usually Don't
Traditional sportsbooks concentrate on games, players, futures, props, spreads, totals, and parlays. Prediction markets can also cover business decisions, relocations, stadium projects, league policy, trades, retirements, and other off-field developments.
The Chicago Bears Relocation Example
One Kalshi prediction market asked where Chicago's pro football team would relocate. The listed outcomes included a new location in Illinois, Indiana, no relocation announcement, and Iowa.
This type of Chicago Bears relocation question shows the clearest prediction-market advantage. Instead of wagering on the next game, point spread, total score, or player statistics, traders can take a position on a long-term franchise decision that may unfold through negotiations, government approvals, stadium plans, and official team announcements.
Contract rules determine what counts as a relocation, which announcement qualifies, the deadline, and the approved resolution source. Traders should read those rules before relying on the headline alone.
Team Relocations
Questions can cover whether a franchise announces a new city, state, stadium, or permanent home.
Trades and Signings
Markets may track where a player will compete, whether a trade happens, or whether a contract is signed.
Coaching Decisions
Questions can focus on a firing, resignation, retirement, extension, or next head coach.
League Decisions
Markets can track expansion, media rights, schedule changes, labor agreements, or rule changes.
Stadium Projects
Contracts can cover public approvals, financing, construction milestones, locations, or opening dates.
Market Categories
What Can People Trade on Prediction Markets?
Available categories depend on the exchange, federal rules, state litigation, customer eligibility, liquidity, and the platform's own listing standards.
Sports
Game winners, spreads, totals, futures, player performance, tournaments, trades, coaching moves, team locations, and league decisions.
Politics and Elections
Election winners, nominations, control of legislative chambers, turnout, appointments, votes, and policy decisions.
Economics and Finance
Interest rates, inflation, employment reports, economic growth, financial benchmarks, company events, and market milestones.
Crypto and Technology
Digital asset prices, product releases, artificial intelligence developments, acquisitions, platform launches, and technology milestones.
Weather and Climate
Temperature ranges, precipitation, storms, snowfall, seasonal measurements, and other independently verifiable outcomes.
Culture and Entertainment
Awards, television outcomes, box-office milestones, music releases, public appearances, and entertainment industry events.
Platforms, Exchanges, and Access
Major Prediction Market Brands Operating in the United States
Not every familiar prediction app owns the exchange that creates and settles its contracts. Some companies operate exchanges and clearinghouses, while others serve as brokers, introducing firms, consumer apps, or distribution partners.
Kalshi is a privately held prediction-market company founded by Tarek Mansour and Luana Lopes Lara. Its regulated structure includes KalshiEX, the designated contract market, and Kalshi Klear, the derivatives clearing organization. Kalshi announced a $1 billion Series E funding round at an $11 billion valuation in December 2025, although exact founder and investor ownership percentages haven't been publicly disclosed.
Polymarket is privately held and founded by Shayne Coplan. Its global blockchain-based platform and CFTC-regulated U.S. business are separate operations with different products, access rules, currencies, market catalogs, and regulatory structures. Polymarket acquired QCEX and its clearinghouse for $112 million in July 2025, and QCX now operates as Polymarket US. Intercontinental Exchange, the parent of the New York Stock Exchange, agreed to invest up to $2 billion and later completed an additional $600 million investment. ICE is a strategic investor and data distributor, not the outright owner of Polymarket.
Coinbase provides a familiar consumer account, funding system, interface, and distribution channel. Coinbase's fourth-quarter 2025 shareholder letter says its U.S. prediction-market rollout used initial market flow powered by Kalshi. Coinbase doesn't own Kalshi based on publicly disclosed information, and trades started inside Coinbase can become Kalshi exchange volume, so Coinbase activity shouldn't automatically be counted as separate exchange market share.
DraftKings Predictions is owned by DraftKings and operates separately from DraftKings Sportsbook. DraftKings disclosed that it owns Railbird Exchange, a CFTC-designated contract market, and runs DraftKings Predictions as a registered introducing broker. The distinction matters in New Jersey because DraftKings can offer a state-licensed sportsbook product and a federally regulated prediction product under the same broader brand while each follows its own rules, eligibility standards, and regulatory structure.
FanDuel Predicts is separate from FanDuel Sportsbook. Financial disclosures show CME Group holds 51% of the prediction-market parent and FanDuel holds 49%. The joint venture gives FanDuel a consumer prediction app connected to established derivatives infrastructure while its sportsbook remains part of New Jersey's licensed sports wagering system.
June 2026 Taker Notional Volume
June 2026 Prediction-Market Volume Snapshot
No regulator publishes a complete real-time market-share report covering every prediction exchange, brokerage app, routed order, and customer account. The figures below show June 2026 taker notional volume reported for Kalshi, Polymarket International, and Polymarket US only. They don't measure total U.S. customer share, unique users, app downloads, revenue, or the entire prediction-market industry.
What the June 2026 Data Shows
The Block's monthly comparison reported $31.5 billion for Kalshi, $10.26 billion for Polymarket International, and $3.04 billion for Polymarket US. Polymarket US therefore represented about 6.8% of the combined volume shown for these three venues, not less than 1%.
Taker notional volume measures trading activity. Contracts can be bought and resold, so the same contract value can contribute to volume more than once. The figure isn't the same as customer deposits, money permanently at risk, operator revenue, or the number of people using each platform.
What the Snapshot Doesn't Measure
Polymarket International is a global platform and shouldn't be described as U.S. market share. The comparison also doesn't include every exchange or consumer app, including ForecastEx, Rothera, Railbird, CME-related products, Crypto.com-related venues, and other operators for which directly comparable public data may not be available.
Coinbase, Robinhood, Interactive Brokers, DraftKings, FanDuel, and other consumer brands can originate orders that execute through underlying exchanges. Counting the app and the exchange separately could count the same activity twice. Public data currently supports a limited exchange-volume comparison more reliably than a complete app-level popularity ranking.
Sports Products Compared
Prediction Markets vs. Licensed New Jersey Sportsbooks
Prediction markets and sportsbooks can both present sports-related prices, but they use different legal classifications, pricing systems, product catalogs, settlement rules, regulatory structures, and customer experiences.
| Category | Prediction Markets | Licensed NJ Sportsbooks |
|---|---|---|
| Core Product | Tradable event contracts | State-authorized sports wagers |
| Primary Regulator | Commodity Futures Trading Commission for regulated exchanges | New Jersey Division of Gaming Enforcement and applicable state authorities |
| Pricing | Traders create prices through bids, asks, supply, demand, and completed trades | Sportsbook trading and risk teams publish and adjust odds |
| Price Display | Usually cents, probability, or Yes and No prices | American, decimal, fractional, or implied probability |
| Counterparty | Another market participant | The sportsbook |
| Typical Products | Yes and No contracts, multi-outcome questions, sports, elections, economics, culture, weather, and other events | Moneylines, spreads, totals, props, futures, parlays, teasers, round robins, and live betting |
| Early Exit | Sell the position when buyers and liquidity are available | Cash Out may be offered on eligible wagers |
| Costs | Trading fees, spreads, slippage, and execution differences | Sportsbook margin is incorporated into odds |
| Resolution | Contract-specific rules, deadlines, and approved information sources | Sportsbook house rules and official event results |
| Market Depth | Varies by contract and liquidity | Large daily sports boards with sportsbook-set limits |
| Nontraditional Questions | Major advantage for relocations, trades, stadiums, politics, finance, and culture | Restricted to approved sports wagering events and wager types |
| New Jersey Oversight | Federal exchange regulation and ongoing federal-state jurisdiction litigation | Direct New Jersey licensing, complaint, account, geolocation, promotional, and responsible-gaming rules |
Sportsbook Advantage
For Conventional Sports Betting, NJ Sportsbooks Offer the More Complete Product
Prediction markets provide unusual questions and tradable positions. Still, someone primarily interested in game betting will usually find far more depth through an official New Jersey Sportsbook.
Licensed sportsbook apps are designed around sports from the first screen to the final settlement. They combine large betting boards, player information, live scores, matchup data, alternate lines, parlays, promotions, loyalty programs, retail locations, conventional banking, and New Jersey-specific consumer protections.
Deeper Betting Menus
Sportsbooks routinely offer moneylines, spreads, totals, team totals, player props, alternate lines, futures, teasers, round robins, quarters, periods, innings, sets, and live markets.
Same Game Parlays
Sportsbook correlation models can price several connected outcomes from one game, including player statistics, team outcomes, totals, and alternate thresholds.
Sports-Specific Promotions
Bonus Bets, odds boosts, profit boosts, parlay boosts, no-sweat offers, second-chance promotions, and selected injury protections are built around sports wagering.
Live Betting Depth
Major sportsbooks update spreads, totals, player props, next-score markets, period outcomes, and cash-out opportunities as games unfold.
Data and Betting Tools
Sportsbooks and related platforms provide scoreboards, statistics, player trends, injury reports, betting splits, research, and price comparison. NJ Gaming Report's Odds Finder Tool helps readers compare sportsbook prices.
Rewards Beyond the Wager
Casino-linked loyalty programs can extend into Atlantic City hotel stays, dining, entertainment, retail, event tickets, and other resort benefits.
Simpler Execution
Sportsbook users select odds, enter a wager, review the payout, and submit. Prediction traders may also need to evaluate spreads, liquidity, fills, contract quantities, and limit prices.
Familiar Payments and Retail Access
Licensed operators can support approved bank, card, prepaid, cashier-cage, promotional, and retail sportsbook options alongside online accounts.
New Jersey Protections
NJ rules cover patron funds, account security, geolocation, complaints, clear promotional terms, responsible-gaming limits, temporary suspension, and statewide self-exclusion.
Sportsbooks Provide More Betting Opportunities, Not Guaranteed Wins
Deeper menus create more ways to construct a wager, compare lines, use a promotion, or follow a game live. They don't guarantee a higher winning percentage or profit. Every wager and event contract carries risk.
The credible comparison is product depth. Sportsbooks offer more sports markets, more player data, more live options, more promotions, and more state-specific protections. Prediction markets offer tradable positions and unusual questions that sportsbooks may never list.
Prediction Markets Still Have a Clear Sports Role
Team relocations, stadium approvals, coaching changes, trade destinations, retirements, league expansion, labor agreements, media-rights decisions, and other off-field questions fit naturally inside event contracts.
For many New Jersey users, the practical answer isn't choosing one industry forever. Licensed sportsbooks can serve game betting, while prediction markets can serve event questions and probability tracking.
Federal and State Jurisdiction
Are Prediction Markets Legal in New Jersey?
CFTC-regulated exchanges operate under federal commodities law, while New Jersey maintains a mature state system for sports wagering. The resulting jurisdiction dispute remains active even after a major appellate ruling favored Kalshi.
New Jersey Sends Kalshi a Cease-and-Desist Letter
The New Jersey Division of Gaming Enforcement argued that Kalshi's sports event contracts violated state sports wagering laws and restrictions involving collegiate sports.
Federal District Court Grants a Preliminary Injunction
The court prevented New Jersey from enforcing the challenged state wagering laws against Kalshi while the federal case continued.
Third Circuit Affirms the Injunction in a 2-1 Decision
The majority held that Kalshi showed a reasonable chance of succeeding on its claim that the Commodity Exchange Act gives the CFTC exclusive jurisdiction over the covered sports event contracts.
Supreme Court Filing Deadline Extended to August 4
Justice Samuel Alito granted New Jersey additional time to file a petition for Supreme Court review. The appellate decision remains a preliminary-injunction ruling, not a final nationwide decision covering every prediction platform and every state.
CFTC Proposes an Updated Event-Contract Framework
The proposal addresses contracts connected with gaming and other enumerated activities. It remains proposed federal rulemaking and hasn't become final law.
What the Third Circuit Ruling Means
The decision keeps New Jersey from applying the challenged sports wagering laws to Kalshi's covered federally regulated event contracts while the case continues. It also supports Kalshi's argument that its contracts are derivatives traded on a CFTC-designated contract market.
The ruling concerns Kalshi and a preliminary injunction. It shouldn't be described as prediction markets defeating licensed New Jersey sportsbooks because sportsbooks weren't the opposing litigants. The dispute is between federal commodities jurisdiction and New Jersey's state gaming authority.
How the Ruling Relates to Polymarket US
Polymarket wasn't a party to the New Jersey Kalshi case. Polymarket US operates through QCX, which the CFTC lists as a designated contract market.
The Third Circuit's reasoning may be relevant to other CFTC-designated exchanges, but that is a legal inference. The ruling didn't directly declare that Polymarket won a New Jersey case.
Fees, Liquidity, and Contract Rules
What Traders Should Review Before Using a Prediction App
Platform access, fees, liquidity, settlement sources, market rules, age requirements, taxes, and state availability can differ. Review the current terms for the exact product before committing funds.
Read the Resolution Rules
Check the exact event, deadline, qualifying action, exclusions, source hierarchy, cancellation rules, and treatment of ambiguous outcomes.
Check Available Liquidity
Displayed prices may apply only to a limited quantity. Larger orders can fill at several prices, fill partially, or remain open.
Compare Total Cost
Include trading fees, spreads, card or bank charges, crypto conversion, network fees, slippage, and the cost of exiting early.
Confirm U.S. Product Access
Polymarket International and Polymarket US aren't interchangeable. Access, funding, regulation, and available markets can differ.
Understand the Tax Records
Keep transaction, deposit, withdrawal, bonus, and profit-and-loss records. Tax reporting can differ by platform and account activity.
Set a Loss Limit
Event contracts can lose the full purchase amount. Decide the maximum acceptable loss before entering a position.
Affiliate Disclosure: NJ Gaming Report may earn a commission when a reader registers through an affiliate link. This doesn't increase the reader's cost or change our editorial opinion.
Prediction Markets FAQ
Common Prediction Market Questions
What Does a 45¢ Prediction-Market Price Mean?
It generally represents a market-implied probability near 45%. Buying at 45¢ creates a maximum gross gain of 55¢ per contract when the selected outcome settles at $1.
Can Prediction-Market Contracts Be Sold Before the Event Ends?
Often, yes. Traders can usually submit a sell order before resolution. The actual execution price depends on available buyers, market depth, spreads, and platform rules.
Are Prediction Markets the Same as Sportsbooks?
No. Regulated prediction exchanges match traders in event contracts, while sportsbooks accept wagers under state gaming rules and publish sports betting odds through their approved systems.
Does Coinbase Own Kalshi?
No publicly disclosed ownership relationship establishes Coinbase as a Kalshi owner. Coinbase provides consumer distribution and other commercial infrastructure connected to Kalshi.
Is Polymarket US the Same as Polymarket International?
No. Polymarket US operates through a CFTC-designated U.S. exchange, while the international platform has separate access rules, market offerings, technology, and regulatory treatment.
Did Kalshi Win Its New Jersey Court Case?
Kalshi won a major appellate decision affirming a preliminary injunction on April 6, 2026. The broader litigation remains active, and New Jersey received until August 4, 2026, to file a petition for Supreme Court review.
Does the New Jersey Ruling Automatically Cover Polymarket?
No. Polymarket wasn't a party to the case. The court's reasoning may be relevant to other CFTC-designated exchanges, but the ruling directly concerns Kalshi.
Why Use a Prediction Market for Sports?
Prediction markets can cover unusual questions such as team relocations, stadium plans, trades, coaching changes, league expansion, and other developments that ordinary sportsbook menus may not include.
Why Use an NJ Sportsbook for Game Betting?
Licensed NJ sportsbooks offer deeper daily boards, extensive player props, Same Game Parlays, live wagering, boosts, Bonus Bets, loyalty benefits, conventional payments, and direct state regulation.
Do Prediction Markets Offer Parlays?
Some platforms now offer combo or multi-event products. Availability, pricing, fills, settlement, and liquidity can differ from the established parlay and Same Game Parlay systems found at major sportsbooks.
Can Prediction Markets Guarantee Accurate Forecasts?
No. Market prices aggregate current trading activity, but they can still be wrong. Liquidity, information quality, participant concentration, spreads, and sudden news can affect prices.
Can Traders Lose the Full Amount?
Yes. Contracts selected on the losing outcome can settle at $0. Trading fees and execution costs can also reduce returns.
Our Current Position
NJ Gaming Report's Opinion on Prediction Markets
We like prediction markets. They're fun, interactive, and different from traditional casino gambling or sports betting. Markets tied to elections, economics, culture, technology, weather, team relocations, stadium decisions, and other real-world events give people a new way to follow changing probabilities.
Sports questions such as whether the Chicago Bears could move to Indiana show why prediction markets deserve a place in the broader gaming and event-trading conversation. Licensed sportsbooks usually won't list a market around a franchise relocation decision, while a prediction exchange can build a contract around the announcement, destination, deadline, and official resolution source.
When the subject is conventional sports betting in New Jersey, we side with the sportsbooks. Licensed NJ sportsbook apps offer deeper betting menus, more player and team data, Same Game Parlays, alternate lines, extensive live betting, Bonus Bets, profit boosts, odds boosts, selected second-chance offers, loyalty programs, Atlantic City connections, familiar payment options, retail locations, and direct New Jersey regulatory protections. Prediction apps don't currently match that complete sports product.
That doesn't mean everyone needs to make the same choice. Someone may prefer an exchange order book, tradable positions, or unusual event questions. Someone else may prefer the simplicity, promotions, research, and betting depth of a sportsbook. Neither preference bothers us.
DraftKings and FanDuel now participate in both sides of the market through separate sportsbook and prediction products. Their entry shows that the industry isn't necessarily choosing one system over the other. Familiar brands can provide both, and customers can decide which product fits the specific question or sporting event.
We haven't found credible New Jersey polling proving that a majority of residents or visitors supports prediction markets, so we won't present that assumption as measured fact. Still, current growth, platform expansion, and trading activity show substantial public interest. From our perspective, the market is wide open, and there's room for prediction exchanges, licensed sportsbooks, casinos, sports fans, traders, residents, and visitors. There's something for everyone in New Jersey.
Primary and Supporting Sources
Prediction Market Research Sources
Legal status, promotions, market access, fees, and platform relationships can change. The sources below support the principal factual claims and should be reviewed during future page updates.
Fact review completed July 18, 2026. Market prices, promotional offers, platform access, fees, and legal proceedings can change after publication.