Prediction Market Tax Push Gains Pace Across States
Highlights
Legislative push for new taxes across states on prediction market platforms.
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The revised measure follows an April court decision granting Kalshi a preliminary injunction against New Jersey regulators.
Many states now look forward to predicting market taxes, with North Carolina and New Jersey advancing tax bills. These developments come after Illinois became the first state to impose a tax on the federally regulated platforms.
A conference committee budget report containing a 6% tax on prediction markets cleared second reading in both chambers of the North Carolina legislature on July 1. Meanwhile, New Jersey lawmakers advanced companion measures that would levy a separate 9% surtax on prediction market operators.
Such measures emerge as states seek to generate revenue from gambling, even as ongoing conflicts over federal oversight of sports-event contracts continue nationwide.
The conference committee budget report in North Carolina includes a gambling-related provision introducing a 6% tax on the net trading fee revenue that prediction market operators earn from transactions conducted within the state.
North Carolina takes a different approach from Illinois by leaving prediction market software solutions under CFTC supervision rather than creating a state regulatory framework, while still requiring platforms such as Kalshi to pay state taxes.
Whereas New Jersey lawmakers adopted a more limited approach after extensively amending companion bills in both legislative chambers that had originally sought to treat prediction markets the same as sportsbooks.
The Senate Budget and Appropriations Committee adopted a substitute version of Senate Bill 4447 on June 28, while the Assembly Budget Committee moved Assembly Bill 5336 forward. Under the revised proposals, income earned from operating prediction markets would be subject to a 9% surtax.
Initially, the legislation would have mandated that prediction markets offering sports event contracts obtain licenses from the New Jersey Division of Gaming Enforcement. Operators, including Kalshi, would have faced the state’s 19.75% sportsbook tax, a further 10% surcharge, and responsible gambling compliance obligations.
Later, the proposal was narrowed after Kalshi won a preliminary injunction against New Jersey regulators in April.
For more information, Refer Here!
A conference committee budget report containing a 6% tax on prediction markets cleared second reading in both chambers of the North Carolina legislature on July 1. Meanwhile, New Jersey lawmakers advanced companion measures that would levy a separate 9% surtax on prediction market operators.
Such measures emerge as states seek to generate revenue from gambling, even as ongoing conflicts over federal oversight of sports-event contracts continue nationwide.
The conference committee budget report in North Carolina includes a gambling-related provision introducing a 6% tax on the net trading fee revenue that prediction market operators earn from transactions conducted within the state.
North Carolina takes a different approach from Illinois by leaving prediction market software solutions under CFTC supervision rather than creating a state regulatory framework, while still requiring platforms such as Kalshi to pay state taxes.
Whereas New Jersey lawmakers adopted a more limited approach after extensively amending companion bills in both legislative chambers that had originally sought to treat prediction markets the same as sportsbooks.
The Senate Budget and Appropriations Committee adopted a substitute version of Senate Bill 4447 on June 28, while the Assembly Budget Committee moved Assembly Bill 5336 forward. Under the revised proposals, income earned from operating prediction markets would be subject to a 9% surtax.
Initially, the legislation would have mandated that prediction markets offering sports event contracts obtain licenses from the New Jersey Division of Gaming Enforcement. Operators, including Kalshi, would have faced the state’s 19.75% sportsbook tax, a further 10% surcharge, and responsible gambling compliance obligations.
Later, the proposal was narrowed after Kalshi won a preliminary injunction against New Jersey regulators in April.
For more information, Refer Here!
