For a while it wasn’t in the US. They now have a cut-down version. But a lot of people use VPNs to access the less-restricted international version. So to answer your question, a lot of users are using it in a way that’s illegal.
It and Kalshi are not. But we don't have regulators that want to enforce the law here.
Polymarket in particular started out using crypto and off shoring with a "not legal in the US, winkwink" to get try and dodge regulations.
Why wouldn't it be
It creates financial incentives for anti-social behavior and the proposed benefits of it being a way to determine truth are dubious and self-serving and would not be worth the societal cost regardless.