Are Prediction Markets Halal? Polymarket and Kalshi

Prediction markets are having their moment. Polymarket and Kalshi moved from a niche corner of the internet to mainstream financial media, Kalshi won its regulatory fights, and the pitch got very good.

The pitch is this: these are not casinos. They are information markets. Aggregated forecasting. A way for the crowd to price the probability of real events more accurately than any pundit. You are not gambling, you are expressing a calibrated view and getting paid for being right.

It is a genuinely clever argument. It does not survive contact with the fiqh, and the reason is worth understanding properly, because the same reasoning decides perpetual futures, insurance, and a lot of what gets sold to Muslims as halal yield.

Both platforms come back Haram on our screen. Polymarket and Kalshi. So does Opinion, a third entrant in the same category.

Maysir is about structure, not about how it feels

Muslims tend to picture gambling as a roulette wheel, something obviously frivolous, done in a dark room, by people making bad decisions. So when a transaction looks sober and analytical and happens on a regulated exchange with a Bloomberg terminal open next to it, the instinct is that it must be something else.

Classical fiqh does not test the atmosphere. It tests the contract, and maysir has three structural elements.

First, each party puts up consideration, a stake they stand to lose. Second, the outcome turns on an event neither party controls. Third, and this is the decisive one, the transaction is zero-sum by construction: the contract creates no new value, and one party's gain is precisely the other party's loss.

That third element is what separates a wager from commerce, and it is worth sitting with. When you buy wheat from a farmer, both of you are better off. The farmer wanted money more than wheat, you wanted wheat more than money, and the wheat still exists and still feeds someone. Value was created by the exchange. When you and I stake $100 on whether it rains next Tuesday, nothing is produced. One of us takes $100 from the other. The rain was going to happen or not regardless of our contract.

A prediction market contract is built to resolve to either 1 or 0. It has no existence, no utility, and no cash flow outside that resolution. It is not a claim on a productive enterprise that happens to be uncertain. Uncertainty is the entire product.

That is maysir. The suit and the regulator do not change the structure.

Where the information-market defence actually breaks

The strongest form of the defence deserves a straight answer rather than a dismissal, because it contains something true.

It is true that prediction markets produce useful information. Aggregated probability estimates from people with money at risk really are better calibrated than free opinion, and that is a real social good. It is also true that Islamic law cares about benefit, maslahah, and does not prohibit things arbitrarily.

The problem is that the information is a byproduct, not the transaction. The price signal emerges from thousands of people entering wagers. You cannot participate in producing the signal without taking the bet. If the useful output of a structure can only be obtained by entering a prohibited contract, the usefulness of the output does not repair the contract. This is an old principle and it is not specific to crypto: a lottery funding a hospital is still a lottery.

There is a second defence, that these are hedging instruments rather than bets. A farmer hedging a bad harvest, an airline hedging fuel. And here the argument gets more serious, because Islamic law does treat genuine risk transfer differently from risk creation.

But notice what Islamic finance actually built when it faced this. Conventional insurance was found problematic precisely because of gharar and maysir in its structure, and the response was takaful, a cooperative model where participants mutually guarantee each other from a pooled fund and any surplus returns to them. The industry did not conclude that hedging makes a wager permissible. It rebuilt the structure so the risk pooling was cooperative instead of adversarial.

A prediction market is adversarial by design. Your counterparty is not sharing your risk, they are taking the opposite side of it, and there is no pool and no mutual guarantee. If you want the hedging benefit within Shariah, takaful is the shape it takes.

"But isn't buying Bitcoin also a bet on an uncertain outcome?"

This is the objection that comes up every single time, usually from someone who thinks it is a checkmate, and it is worth answering carefully because the answer is the load-bearing distinction in all of halal investing.

No. And the difference is not about how risky the two things are.

When you buy Bitcoin on spot, you own a thing. It presently exists, it has an ascertainable supply, you can hold and transfer it without permission, and it carries a lawful use. It is recognised property, mal, under the six-point test in our methodology. Its price is uncertain, and price uncertainty is ordinary commercial risk, which Islam permits and which every merchant in history has carried. Your gain does not require a named counterparty's matching loss. The asset can appreciate because more people find it useful.

A prediction market position owns nothing. There is no underlying asset, no supply, no utility, and no possibility of the contract being worth something because it became useful. It resolves, someone pays, and it ceases to exist.

Same superficial feature, uncertainty about the future, completely different contracts. This is exactly why we screen spot assets asset by asset and reject derivatives categorically, and it is why the halal crypto list has 42 permissible entries while no perpetual futures venue on it passes.

Kalshi has a second problem

Prediction markets alone would be enough. Kalshi's core operations combine prediction markets with leveraged perpetual futures, which adds riba to the maysir, since perpetual funding rates are periodic payments between long and short positions for holding leverage over time.

There is a further consideration for anyone looking at the equity rather than the platform. Investing in Kalshi's pre-IPO round is impermissible not only because of what the company currently does, but because the capital raised is explicitly earmarked to expand those derivatives and betting markets. You are not buying incidental exposure to a mixed business. You are funding the growth of the specific activity that fails the screen.

The same reasoning applies to Hyperliquid, where over 33% of protocol revenue comes from perpetuals and roughly 99% of retained fees are recycled into token buybacks. When the non-compliant activity is what funds the asset's value, there is no permissible slice to hold.

The part that will cost you actual money

Set the fiqh aside for a paragraph, because there is a fraud problem here that is more urgent than the ruling.

Neither Polymarket nor Kalshi has minted a native cryptocurrency. There is no $POLY. There is no $KALSHI. Polymarket has published no tokenomics, no vesting schedule, and no airdrop eligibility tiers. Kalshi has never issued a token at all.

Every presale, private round, and early allocation you have been offered in either name is fake. Not "risky." Not "unofficial." Confirmed third-party scams trading on brand recognition, and in Kalshi's case on the attention its Solana integration generated.

So if you were about to buy one of these, the Shariah verdict is the second problem. The first is that there is nothing to buy. We track this on the presale list alongside the campaigns that do check out.

Where this leaves you

If you hold prediction market positions, our position is that they are impermissible and that purification does not help. Purification is a remedy for incidental impure income inside an otherwise sound holding, not a toll you pay to keep a prohibited contract. Close the positions and take whatever the outcome is.

If you want exposure to being right about the world, that instinct is fine and Islam has nothing against it. Own assets. Screened, spot, self-custodied assets whose value can rise because they are useful to someone. That is the same conviction expressed through a contract that produces something.

I will say plainly where I am less certain. The narrow case of a genuine commercial hedge, a farmer using an event contract against a specific real exposure rather than a speculative position, is the one place I think a serious scholar could reach a different conclusion, and some do on analogous instruments. I do not think it rescues retail participation in these platforms, which is not hedging by any description, but I am not going to pretend the edge case is settled.

The centre of it is settled, though. A contract whose only function is that one party pays another when an event resolves is the thing the prohibition on maysir was describing. Regulation made it legal. It did not make it something else.

Every verdict on the assets mentioned here, with the full reasoning, is published on the screening list.