Quick Facts About Polymarket
- Polymarket is a prediction market app with events on sports, politics, culture, and other categories.
- You buy Yes/No event contracts that pay out $1 each if your prediction is correct.
- Polymarket is only accessible via the iOS app for US traders.
How Does Polymarket Prediction Market Work?
On the Polymarket app, you’ll see several outcomes tied to real-world events. They’re featured with Yes/No event contracts, which you can buy or sell based on your predictions. The pattern is simple:
- You buy Yes event contracts if you predict an outcome to occur.
- You buy No event contracts if you believe an outcome won’t happen.
The above pattern is also how other legit prediction markets in the US operate. For instance, I found some traders asking, how does Kalshi work? Then, I reviewed Kalshi and confirmed that the brand also uses Yes/No event contracts.
In the US, Polymarket is available only via the iOS app on the Apple App Store. You can’t use the website, and an Android app hasn’t been launched yet.
Price of Polymarket Event Contracts
How does Polymarket trading work? To answer that, I’ll be explaining the event contracts in detail.
At Polymarket, I always saw event contracts priced between $0.01 and $0.99. For the record, the brand doesn’t set the price. Instead, it’s affected by market demand and supply as people trade.
To illustrate, let’s suppose a Yes contract costs $0.40. If more traders buy it, its price can increase to $0.50, for instance. However, if people are buying No, the cost of the Yes outcome can drop to $0.30.
Since the price follows market sentiment, you can also read it as a probability. Here’s an example of an NHL event I saw during my Polymarket review:
| NHL | Yes | No |
|---|---|---|
| Hurricanes | $0.51 | $0.50 |
| Golden Knights | $0.50 | $0.51 |
The $0.51 for Hurricanes represents a 51% probability of them winning, but it’s 50% for the Golden Knights, making the game an even one. I know you may want to ask why the probabilities sum up to 101% instead of 100%. Well, it’s because the contract prices themselves add up to $1.01 rather than $1. That extra $0.01 can be read as the spread, resulting from bid-ask price differences.
Event Contract Payout
For each winning event contract, Polymarket pays $1. You don’t always have to wait until settlement, though. Polymarket is a trading hub, so you can decide to sell your event contracts at any time. I often sell early if the contract price rises and there’s an opportunity to lock in a gain. Conversely, I also sell early to minimize losses if the contract price falls.
How Does Polymarket Work Legally in the US?
Yes, Polymarket is legal in the US. From my findings, the US app is operated by QCX LLC, which is regulated by the Commodity Futures Trading Commission (CFTC). With CFTC approval, Polymarket has the federal go-ahead to offer its trading markets nationwide.
That said, I advise checking with your local laws before joining Polymarket. The app doesn’t have any specific state exclusions, but it may not be accessible in Nevada. I also observed this in my review of Kalshi. For reference, Kalshi is legal in California, Florida, and all other states except Nevada.
Top 5 Prediction Markets on Polymarket
I believe my explanation of how Polymarket works has covered the app’s basic functions. Now, let’s look at the top five prediction markets where you actually trade:
1. Sports
In the Polymarket app, you can trade game results in 10+ sports. I saw the NBA, NFL, NHL, and MLB, so all major US sports leagues are represented, along with others like soccer, boxing, tennis, and cricket. The main prediction options are moneyline, spreads, and totals, and you can trade pre-game or live.
2. Politics
The politics category on Polymarket is big on elections. When I checked, I traded events such as the:
- Democratic presidential candidate nominee
- Presidential election winner 2028
- Los Angeles mayoral election winner
- Brazil’s presidential election winner
- Next French presidential elections
As such, the events include both local and international polls. Besides elections, Polymarket has events on Fed decisions, individual politicians, military actions, and global political events.
3. Culture
Polymarket’s culture section is quite broad. I spotted Yes/No event contracts relating to music, movies, celebrities, awards, TV shows, video games, tweets, climate, and more. Some markets are based on viral online speculation, such as whether the US will confirm that aliens exist.
4. Economics
In economics, you’re looking at mainly money and finance-related outcomes. For example, I traded event contracts on inflation, Fed rates, and trade wars. Other notable subsections include company performances, macro indicators, bank decisions, and egg prices. In my review to confirm that Kalshi is legal in Florida, I saw similar economic events on the site.
5. Crypto
Last on my list is the crypto prediction market, where most events settle quickly. The options involve predicting the price movements of BTC, ETH, LTC, SOL, XRP, and other popular cryptocurrencies. They include:
- Price to move up or down
- Price to go above or below a certain figure
- Price to fall within a given range
- Price to hit a specific figure
You can choose between 5-minute, 15-minute, 1-hour, 4-hour, and other durations.
How Does Polymarket Work for Deposits and Withdrawals?
Polymarket only permits USD Coin (USDC) on Polygon for prediction market trading in the US. Based on my experience, it’s because the system itself is built on Polygon, hence the name Polymarket. I didn’t see any fiat methods, such as Visa, PayPal, or bank transfers.
You can still deposit using other crypto coins and tokens on Polymarket. However, they’ll be swapped or bridged into USDC on Polygon before you can trade event contracts. I suggest funding your account with USDC directly, though, as it’s the simplest option.
When I withdraw using USDC on Polymarket, I usually receive the funds within 10 minutes. The app itself doesn’t have withdrawal charges, but I pay the usual USDC blockchain network fees.
How Does Polymarket Work for Taxes?
Since the CFTC regulates Polymarket, your trades on the app are subject to US tax rules. That said, the brand won’t handle or withhold any tax on your behalf. Instead, you’re totally responsible for filing.
Personally, I track all my Polymarket event contract trades and outcomes, whether successful or not. Then, I compile and work with a tax professional, specifically one who’s familiar with crypto.
The situation is quite different with an alternative like Kalshi. I was analyzing Kalshi for Texas and found that the brand sends traders tax documentation when they cross certain thresholds. To add context, Kalshi is legal in Texas, and the tax documentation also applies to other states where the site operates.
Pros and Cons of Polymarket in the US
I consider Polymarket one of the best in the US for its multiple prediction markets, including sports, politics, culture, economics, and crypto. The brand is CFTC-regulated, and its event contracts are transparent. However, I’d love the site to extend access beyond the iOS app. In summary, these are the pros and cons you should know about Polymarket:
Pros
- Transparent contract pricing and payouts.
- Regulated by the CFTC.
- Multiple prediction market categories.
Cons
- Only available via iOS app.
Conclusion – Trade Event Contracts on the Polymarket iOS App
I set out on this review to answer this question: how does Polymarket work? At this point, I’m sure I’ve provided all the answers. Polymarket works as a P2P prediction market with Yes/No event contracts for trading.
Buy Yes if you believe an outcome will happen, and No if otherwise. After settlement, you receive a $1 payout per contract if you get the prediction right. All Polymarket activities are conducted under CFTC regulations.
For now, you can only use the Polymarket iOS app in the US. However, I believe the brand will launch an Android and even a website version over time. You can tap the banners on this page to download the app and register today.
