How Prediction Markets Resolve

A prediction market does not pay you for being right about the news. It pays you if the resolution rules are satisfied. Those rules name the question, the deadline, the source, and what happens in the messy cases. Two platforms can list the same story and settle opposite ways.

This is the third page in prediction market basics, after what prediction markets are and how prices work. The practical version is step 1 of How to Research a Prediction Market Before You Trade. Platform specifics are in What Is Kalshi and What Is Polymarket.

What every rule set should tell you

Before you care who the referee is, read the contract for four things:

1. The payout condition. What, exactly, has to be true for Yes to settle at $1?
2. The source. Which document, agency, league, index, or outlet counts? A backup source, if the primary one is silent?
3. The clock. Trading close, determination time, and time zone. "By December 31" is not specific until you know whose midnight.
4. The edge cases. Postponement, cancellation, revision of a statistic, a candidate withdrawing, a game called early, a market whose outcome cannot be known.

Kalshi's help center separates the short rules summary from the full rules and tells you the summary is not the whole contract. Polymarket US documents the same idea: markets resolve on the sources listed in the rules, and the exchange may post a clarification when wording can be read two ways. A clarification explains the existing rules. It is not a new question.

Kalshi: the exchange decides

Kalshi determines outcomes itself. The help center states that the rules, the information used, and the source are in each contract's terms, and that once a contract has expired Kalshi determines the outcome from those rules and that source.

Timing is part of the risk:

• Most markets settle within a few hours after the outcome is known, often about three hours.
• Determination can take from one hour to more than twelve, usually because Kalshi is waiting on the source agency.
• A market can stay open while that data is still unpublished. The help center says an open market is not evidence that the payout criteria failed.
• Trading can end before or after the event looks "over." Settlement waits on the source named in the rules, not on the moment a broadcast ends.

You can request settlement from the market's options menu. Kalshi's markets team reviews those requests. That is a nudge, not a vote. Holders do not decide the outcome.

When rules are silent or a participant cannot play, some contract terms send the market to a fair-market-value settlement or another special payout. Those terms are on the market page. Assume nothing.

Polymarket US: the exchange decides, with named sources

Polymarket US is the regulated US exchange. Its documentation says markets stay open until the outcome is publicly known, and then the exchange determines the result from publicly verifiable information and the criteria in the market's rules.

Sources follow the contract:

• Government data for political and economic markets (Congress, the Bureau of Labor Statistics, the National Weather Service are the examples the docs give).
• The governing league for sports, with a backup ladder (official scorecards and referee reports, then outlets such as the Associated Press, Reuters, and ESPN) described in the sports FAQ.
• A named index for crypto price markets, not "whatever exchange you were watching."

Settlement itself is mechanical once the outcome is final. Polymarket Clearing pays winning contracts at $1.00 and losing contracts at $0.00, unless the rules specify an alternative such as $0.50 or a last fair price. The docs say settlements are final under the Polymarket US Exchange Rulebook.

If a game has no official winner because it was tied, abandoned, or cancelled, the sports FAQ says those markets settle at $0.50. That is a different economic outcome from "my team was about to win." The rule is the position.

Polymarket international: the UMA oracle

The site at polymarket.com does not use that exchange process for ordinary prediction markets. Polymarket's documentation says those markets use the UMA Optimistic Oracle. Up-down price markets can use a Chainlink TWAP instead. The flows below are for the UMA path, as documented on October 13, 2026.

1. Someone proposes the winning outcome and posts a bond, typically $750.
2. A two-hour challenge period starts. If nobody disputes, the proposal is accepted and the market resolves.
3. A dispute requires a counter-bond of the same size. The first dispute opens a new proposal round.
4. If the second proposal is also disputed, resolution escalates to UMA's Data Verification Mechanism. Token holders vote. Polymarket's docs say that vote takes about 48 hours.
5. Once UMA finalizes the outcome, Polymarket's docs say the result is immutable. Winning shares redeem for $1. A rare "unknown / 50-50" vote redeems each token for $0.50.

Bond math is part of the system. The proposer who is wrong, or early, loses the bond. A successful disputer gets their bond back plus half of the proposer's bond, in the cases the docs table lists. This is not an editor at the company picking the story. It is a bonded proposal, a challenge window, and sometimes a token vote.

That is why a polymarket.com price and a Polymarket US price on a similar headline are not interchangeable. The referee, the bond, the challenge window, and the finality rules differ. What Is Polymarket separates the two products. Kalshi vs Polymarket puts the resolution row in one table.

Novig, briefly

Novig grades sports markets when the event ends. Its API docs describe three grades: a single winner, a push that returns collateral, or a fair-market-value price on each outcome. Remediation can undo a settlement and grade the market again. For the product around that process, see What Is Novig.

Disputes are a risk you can price

Most markets resolve quietly, on a source everyone already agrees about. The ones that hurt are the ambiguous ones: a delayed report, a revised print, a definition of "win" that excludes overtime, a proposal on the international site that you think is early.

You cannot remove that risk. You can refuse to trade it blind.

• Read the full rules, not the title.
• Prefer markets whose source you can check yourself (an agency table, a league box score, a filed order).
• If the platform is the decision-maker, know how long settlement usually takes and whether trading continues while you wait.
• If the platform uses UMA, know the bond, the two-hour window, and that a second dispute leaves the outcome to a token vote.
• Write down what would make you wrong about the contract, not only about the event. The research guide is built around that distinction.

Sources

Checked October 13, 2026.

• Kalshi: Market outcomes, Market FAQs, Market rules, Rules summary
• Polymarket US: Market resolution, Market settlement, Sports FAQs, Clarifications
• Polymarket international: Resolution
• Novig grades: Event lifecycle