Is Kalshi legal in all 50 states?

Yes. Because Kalshi is regulated federally by the CFTC as a Designated Contract Market rather than licensed state-by-state like a sportsbook, it operates in every US state — including states like Utah, Hawaii, and California that restrict or entirely ban sports betting. State gambling laws do not apply because event contracts are federal derivatives, not gambling products.

Do I need to be a US citizen to use Kalshi?

No. You need to be a US resident with a valid SSN or ITIN to complete Kalshi's KYC verification, but citizenship is not required. Green-card holders and other legal residents with US tax IDs can open accounts. Kalshi does not currently serve users based outside the United States regardless of citizenship.

Can I lose more than I deposit on Kalshi?

No. Every Kalshi contract is fully collateralized at trade time — you pay the price of the contract upfront, and the maximum loss on any single contract is that price, capped at $1.00. There is no margin, no leverage, and no margin call. If you deposit $500, the absolute worst case is you lose that $500 and no more.

How long does it take for Kalshi to settle a contract?

Settlement runs automatically as soon as the resolution source publishes the outcome. For macro data like a CPI print or an NFP release, that is minutes after the official release. For sports and elections it is minutes to hours after the final result. Settled funds appear in your cash balance immediately and are available for withdrawal or reinvestment.

Does Kalshi report my trading to the IRS?

Yes. Kalshi issues a 1099-B at year-end summarizing your realized gains and losses, and reports the same information to the IRS. Depending on the contract type, gains may be treated as Section 1256-style 60/40 long-short capital gains or as ordinary short-term capital gains. Consult a tax professional for your specific situation.

How does Kalshi make money if it isn't the counterparty?

Kalshi earns a small per-contract trading fee on every fill, on both the buy and sell side. There is no spread markup, no inactivity fee, and no withdrawal fee. Because Kalshi's revenue is fee-based rather than book-based, the exchange has no directional exposure to who wins any given market — it collects the same fee whether YES or NO settles.

Can I sell a Kalshi position before the market resolves?

Yes. Every Kalshi contract trades continuously on the order book from listing until resolution, so you can close a position at any time by hitting the opposite side of the book. That flexibility is one of the biggest structural advantages over a sportsbook, where a placed wager is locked in until the game finishes.

What happens if the resolution source is unclear or disputed?

Every Kalshi market spec names a specific resolution source and a tiebreaker procedure, filed with the CFTC in advance. In the rare case of a genuine dispute, Kalshi's rules committee reviews the evidence under published procedures and issues a binding resolution. The exchange cannot arbitrarily void a market — any deviation from the spec requires CFTC involvement.

How Kalshi works: the CFTC-regulated event-contract exchange

What Kalshi actually is

Kalshi is a Designated Contract Market (DCM) regulated by the Commodity Futures Trading Commission — the same federal agency that oversees crude-oil futures, interest-rate swaps, and every other regulated derivatives venue in the United States. Unlike a sportsbook, Kalshi is never your counterparty. It runs an order book where traders on opposite sides of binary YES/NO event contracts meet and transact, and Kalshi collects a small fee for hosting the match. That distinction matters more than any single feature: an exchange has no incentive to see you lose, because it earns the same commission whether you win or lose. Kalshi received its DCM license in 2020 and has been expanding the scope of contracts it can list ever since, moving from narrow economic-data markets in the early years to a broad catalog covering macro releases, weather, sports, entertainment, and political outcomes in 2026.

How a contract gets listed

Every Kalshi market is filed with, and approved by, the CFTC before a single trade prints. The listing document has to define the contract in language precise enough that two lawyers looking at the resolution source will always come to the same YES/NO answer.

The resolution source

Each contract names a specific, verifiable source of truth — a Bureau of Labor Statistics release, a National Hurricane Center advisory, a Nielsen rating, an official league scoreboard. Ambiguity is what gets contracts rejected during review, so the specs read like insurance policies: exact times, exact revisions, exact tiebreakers.

The market spec

The spec also fixes the tick size (usually 1 cent), position limits (published per contract), and the trading hours. Once approved, the market opens and rests on the exchange until its resolution date. Kalshi cannot arbitrarily void or re-price a market — any change has to go back through the CFTC filing process.

How prices form

Kalshi prices live between $0.01 and $0.99, and the price literally is the implied probability. A contract trading at $0.62 means the market thinks the event is about 62% likely. Order flow moves the price the same way any other central-limit-order-book market works: aggressive bids lift the ask, aggressive offers hit the bid, and the mid-price walks with the flow. There is no algorithmic market maker inflating the spread — every fill is against another trader's resting order or an official market maker who has to compete on price.

Settlement and payout

When the underlying event resolves, the winning side of every open contract receives exactly $1.00 in USD and the losing side receives $0. Funds clear into your Kalshi cash balance the moment settlement runs and can be withdrawn via standard ACH to the bank account you linked at signup. There is no rolling expiry, no maintenance margin, and no margin call — your maximum downside on any position is exactly the amount you paid to enter it, capped at $1.00 per contract. That fully-collateralized structure is a big part of why the CFTC approved event contracts in the first place: traders cannot blow up an account they never funded.

Fees

Kalshi charges a public, formulaic per-contract trading fee that scales with price and quantity. There is no spread markup layered on top of the order book, no deposit fee, no ACH withdrawal fee, no monthly account fee, and no inactivity fee. See our dedicated fees article for the exact formula and worked examples — but the headline is that Kalshi is meaningfully cheaper than a −110 sportsbook line on any market priced near the middle of the book.

Account setup and KYC

To open a Kalshi account you need to be a US resident with a valid SSN or ITIN. KYC is the standard identity-verification flow — name, address, date of birth, government ID — and usually finishes within a few minutes. Once verified, you fund the account via ACH or debit card, and you can start placing orders immediately. Kalshi does not require a minimum deposit and does not charge for account maintenance.

How Kalshi is different from a sportsbook

This is the single most common point of confusion, so it's worth being explicit. A sportsbook writes the line, takes the other side of your bet, and profits from the vig baked into its odds — the house always wins in expectation. Kalshi never writes a line. Every price on the screen exists because another trader is willing to take the opposite side at that price. Your win comes out of another trader's account, not out of Kalshi's balance sheet, and Kalshi's revenue is a thin, transparent fee regardless of who wins.

Why the CFTC framing matters

Federal regulation gives Kalshi two structural advantages that state-licensed sportsbooks cannot match. First, Kalshi operates in all 50 states — including states like Utah, Hawaii, and California that heavily restrict sportsbooks. Second, Kalshi's contracts are recognized as regulated derivatives, which means clearer tax treatment, mandatory segregation of customer funds, and CFTC-supervised dispute resolution. If something goes wrong, there is a federal regulator you can escalate to.