Investing

Are Kalshi and Polymarket Halal? Prediction Markets Explained

Zoya Team

• 10 min read
Are Kalshi and Polymarket Halal? Prediction Markets Explained

Prediction markets like Kalshi and Polymarket are designed to look and feel like financial markets. You buy contracts, watch prices move, study data, and sell when you think the market is wrong.

But underneath that market-style interface is a much simpler transaction: two sides put money on an uncertain outcome, and the winner gets the loser’s stake.

That is why the scholars who have studied modern prediction markets generally classify these contracts as maysir, or gambling.

The fact that a platform is regulated, uses an exchange, involves research, or produces useful forecasts does not necessarily change that underlying structure. And owning stock in a company involved in prediction markets, such as Robinhood or Coinbase, is a separate Shariah question altogether.

Key takeaways

  • Prediction markets put two sides against each other on an uncertain outcome. One side wins the other side’s money.
  • Scholars who have studied this structure generally classify it as maysir, with gharar as an additional concern.
  • Research, skill, or useful forecasting data do not change how the contract works.
  • Hedging a real financial risk deserves more nuance, but it does not create a blanket exception for prediction markets.
  • Owning shares in a company involved in prediction markets is a separate Shariah-screening question.
  • Under the majority scholarly view, gains already earned through gambling should generally be given away rather than kept.

In this article

  1. How prediction markets work
  2. Why scholars consider prediction markets maysir
  3. What about gharar?
  4. Common objections to the Shariah concerns
  5. What if you need to hedge a real risk?
  6. What if you own Robinhood, Coinbase, or another company involved in prediction markets?
  7. What if you already made money from prediction markets?
  8. The bottom line
  9. Frequently asked questions

How prediction markets work

Prediction markets let you trade contracts tied to yes-or-no questions.

For example:

Will Chicago get more than 10 inches of snow before January 1, 2027?

On platforms like Kalshi, a contract might trade anywhere from $0.01 to $0.99 and settle at $1 if you are right or $0 if you are wrong.

Here is a simplified example:

  1. You buy 100 Yes contracts at $0.40 each, so you put in $40.
  2. Another trader takes the No side at $0.60, putting in $60.
  3. The $100 stays in the market until the question is resolved.

If Chicago gets more than 10 inches of snow, you get the $100. Your $60 profit comes from the other trader’s $60.

If it does not, the other trader gets the $100 and your $40 becomes part of their profit.

That is the core of the transaction: both sides put money down, and one side walks away with the other side’s stake.

Kalshi is a US exchange that was designated by the CFTC in 2020. Polymarket uses crypto infrastructure and a token backed 1:1 by USDC.

These markets have grown fast. According to the Pew Research Center, combined monthly trading volume on Kalshi and Polymarket reached about $24 billion in April 2026.

The core Shariah concern

Three things matter:

  • Both sides put money at risk on an uncertain outcome.
  • One person’s gain comes directly from the other person’s loss.
  • Neither side is buying ownership in an underlying business or asset. The contract pays only based on whether the event happens.

That is why scholars who have analyzed prediction markets classify the contracts as maysir, or gambling.

It does not really matter whether the question is about snow, an election, inflation, or a football game. The transaction works the same way.

Why scholars consider prediction markets maysir

The Quran explicitly prohibits maysir:

“O you who have believed, indeed, intoxicants, gambling … are but defilement from the work of Satan, so avoid it that you may be successful.”

Quran 5:90, Sahih International

In Islamic jurisprudence, maysir and qimar refer to gambling or wagering: money is put at risk on an uncertain outcome, and one participant gains at another’s expense.

One of the most detailed scholarly treatments of modern prediction markets is a September 2026 paper by Mufti Faraz Adam for the Shariyah Review Bureau, peer-reviewed by Shaikh Muhammad Ahmad Sultan.

Its conclusion is straightforward: a binary event contract is qimar because one side’s gain is the other side’s loss.

The paper describes itself as preliminary research rather than a definitive fatwa. But the conclusion is also consistent with earlier scholarly rulings on closely related products like binary options.

For example, SeekersGuidance identifies gambling as a core problem with binary trading because the trader is putting money on an unknown future outcome.

What about gharar?

Gharar means excessive uncertainty in a transaction.

In Sahih Muslim 1513, the Prophet ﷺ prohibited transactions involving gharar.

Prediction markets have obvious uncertainty: the contract ultimately pays either its full value or nothing based on a future event.

But gharar is really the secondary issue here.

The bigger problem is maysir. Both sides are putting money down, and one side’s gain comes from the other side’s loss.

Common objections to the Shariah concerns

Prediction-market supporters make a few reasonable arguments for why these products are different from ordinary gambling.

Some of those arguments explain why prediction markets are useful. They do not necessarily change what the transaction is.

But prediction markets produce useful information

Prediction markets can take the views of thousands of people and turn them into a probability. In some cases, that can be a useful forecasting tool.

But usefulness is not enough to make a transaction halal.

The Quran makes that distinction explicitly when discussing gambling:

“In them is great sin and [yet, some] benefit for people. But their sin is greater than their benefit.”

Quran 2:219, Sahih International

There is also a simple distinction here: you can use prediction-market data without betting on the market yourself.

Looking at Kalshi or Polymarket odds as one input into a forecast is not the same thing as putting money on the outcome.

What if I’m using it to hedge?

This is the strongest edge case.

Imagine a farmer who will lose money if there is a drought. Buying a contract that pays out if a drought occurs looks less like speculation and more like insurance.

That matters. Hedging a real financial risk is not the same thing as betting because you think you know who will win an election.

But a legitimate reason for making a trade does not automatically make the trade itself halal.

Mufti Muhammad Taqi Usmani has written that futures remain impermissible whether they are used for speculation or hedging (source).

The Shariyah Review Bureau paper leaves a little more room. It says a transaction tied to a genuine, existing commercial exposure may deserve individual review by a qualified Shariah board.

That should not be read as general permission to use prediction markets for hedging.

If you are actually managing a real business risk, that is a different situation from speculation and worth reviewing separately.

What if skill is involved?

Research and skill can absolutely make you better at predicting an outcome.

A trader might spend hours studying polls, weather models, economic data, or company earnings.

That still does not change how the trade works.

A skilled poker player is still gambling. The fact that one person is better at estimating the odds does not change the underlying wager.

With a prediction market, you put money at risk, somebody takes the other side, and one of you ultimately gets the other person’s stake.

Does it matter that there’s no house?

Not really.

Prediction markets often point out that they are exchanges. You trade against other participants rather than simply betting against a sportsbook.

But the existence of a traditional “house” is not what makes something gambling.

If two people each put money down on opposite outcomes and the winner gets the loser’s stake, changing how the two sides are matched does not change the underlying transaction.

As the Shariyah Review Bureau paper puts it:

“An automated wager is still a wager.”

Isn’t investing in stocks also gambling?

No. The transactions are fundamentally different.

When you buy stock, you own part of a real business. That business owns assets, sells products or services, earns revenue, and can create value over time.

Your investment might still lose money. Uncertainty by itself does not make something gambling.

With a prediction-market contract, you are not buying part of an underlying business or asset. You are taking a position on whether an event will happen, and your gain comes from someone who took the other side.

That does not mean every kind of stock trading is automatically fine. Highly speculative or very short-term trading can raise separate Shariah questions, which we cover in our guide to day trading in Islam.

What if you need to hedge a real risk?

Islamic finance does not require people to simply accept every financial risk.

Hedging itself can be legitimate. The question is how you do it.

Resolution 238 of November 2019 from the OIC International Islamic Fiqh Academy discusses approaches including diversification, takaful, parallel independent contracts, and guarantees.

If you have a real commercial exposure, your situation is different from someone simply trying to profit from predicting an event.

But that does not create a blanket exception for Kalshi or Polymarket.

The better approach is to look for a Shariah-compliant way to manage the specific risk and, where necessary, have the structure reviewed by a qualified scholar or Shariah board.

What if you own Robinhood, Coinbase, or another company involved in prediction markets?

Trading a prediction-market contract is not the same thing as owning stock in a company that happens to offer or make money from prediction markets.

Kalshi and Polymarket themselves are private as of September 2026, but several public companies now have exposure to the industry.

Zoya’s Shariah screening methodology looks at the company as a whole.

That includes:

  • What the company does. Companies whose core business is prohibited, including gambling, are considered non-compliant. For mixed businesses, impermissible revenue must stay within the applicable threshold.
  • How the company is financed. Under AAOIFI standards, interest-bearing debt and interest-bearing assets must stay within the required financial limits.

So a company launching prediction markets does not automatically answer the Shariah question by itself. You still have to look at how significant that business is relative to the company overall.

As of September 2026:

For some of these companies, prediction markets or gambling are central to the business. For others, they are still a relatively small piece.

And those numbers can change quickly.

That is why you should check the current Zoya report for a stock rather than relying on a status or revenue figure from an older article.

What if you already made money from prediction markets?

If you already traded prediction markets, the next question is what to do with the gains.

IslamQA cites the majority position that gambling proceeds should be given to the poor and needy rather than kept.

It also mentions some scholarly disagreement, including a minority view attributed to Ibn Taymiyyah concerning someone who has repented.

Under the majority view, scholars generally advise:

  1. Stop participating.
  2. Work out how much profit you made from the prohibited transactions.
  3. Give those gains to the poor and needy.
  4. Repent from the activity.

This is different from stock purification.

With stock purification, you are usually removing a small amount of impermissible income from an otherwise permissible investment.

With a prohibited wager, the gain itself came from the prohibited transaction.

If the amount is substantial or your situation is more complicated, speak with a qualified scholar about how to handle it.

The bottom line

Prediction markets can be useful. They can aggregate information, produce interesting forecasts, and help people think about probabilities. None of that changes how the trade itself works. You put money on an uncertain outcome. Someone else takes the other side. One of you wins, and the other loses their stake. That is why the scholars who have directly studied modern prediction markets generally classify them as maysir.

There are edge cases worth treating separately, especially genuine commercial hedging. And owning stock in a company that offers prediction markets is a different Shariah question altogether. But for someone simply asking whether trading contracts on Kalshi, Polymarket, or similar platforms is halal, the scholarly analysis so far points in one direction.

Frequently asked questions

Do prediction markets count as gambling?

Yes. Prediction markets involve participants putting money at risk on an uncertain outcome, with the winning side profiting from the losing side’s stake. That is why scholars classify them as maysir, or gambling.

Are Kalshi and Polymarket halal?

No. Both platforms use event contracts where participants take opposite sides of an uncertain outcome and one side profits at the other’s expense.

Are Robinhood prediction markets halal?

No. Robinhood gives users access to the same type of event contracts discussed above. Using a different app or broker does not change the underlying transaction. Owning Robinhood stock (HOOD) is a separate Shariah-screening question.

Are sports prediction markets halal?

No. Whether the contract is about football, basketball, an election, inflation, or the weather does not change its basic structure: money is put at risk on an uncertain outcome, and the winning side profits from the losing side.

Is betting on elections halal?

No. Election prediction markets use the same basic structure as other prediction markets. Our guide to betting on presidential elections covers this in more detail.

Is future trading considered halal in Islam?

Generally, no. Conventional futures trading is considered impermissible by many scholars, though futures and prediction markets are not the same product. Futures raise their own issues around ownership, settlement, gharar, and contract structure. The relevant point here is that using a prediction market for hedging does not automatically make the event contract halal.

Is the stock market halal for Muslims?

Yes, it can be. Buying stock gives you ownership in a real business, so the ruling depends on the company’s activities and financials. That is different from a prediction-market contract, where the payoff depends on whether an event occurs and one side profits at the other side’s expense.

Is crypto trading halal in Islam?

It depends. The answer depends on the asset and how it is traded. Scholars differ on some cryptocurrencies and trading structures. In the case of Polymarket, crypto is just the settlement mechanism. The main Shariah concern comes from the prediction-market contract itself.

Is Polymarket halal because it uses crypto?

No. Using crypto changes how the transaction is funded, not what the transaction is. Participants are still taking opposite sides of an uncertain event, with one side profiting from the other.

Can prediction markets be halal if I’m using them to hedge?

Not generally. A genuine business need to manage risk is different from speculation, but that does not automatically make the contract permissible. Some scholars have left room for specific hedging arrangements to be reviewed individually. That should not be read as a general permission to trade prediction markets.