"New Jersey considers implementing a 9% tax on prediction markets"

The discussion on how to tackle the prediction market phenomenon has gained significant traction. But what exactly are these prediction market platforms? Are they a financial product, a creative way to bypass gambling regulations, or something entirely different?

As debates continue, New Jersey lawmakers aim to introduce a 9% tax on income earned by companies through prediction markets. This proposed law targets operators rather than consumers. On June 28, 2026, the Senate Budget and Appropriations Committee approved S4447, sponsored by Senate President Nicholas Scutari and Senator Paul Sarlo, with a 9-4 vote. The bill proposes to collect taxes from operator fees and revenue from prediction markets, not from the total volume of event contracts traded, aligning logically with market dynamics. Meanwhile, an Assembly Bill, A5336, sponsored by Assembly Speaker Craig Coughlin and Assembly members Linda Carter, William Moen, and Eliana Pintor Marin, seeks to rally support for this proposal. Both bills have passed their respective committees and now await further examination and verification before potentially being signed into law by Governor Mikie Sherrill.

So far, there's limited information about New Jersey's potential regulation of prediction markets. The latest initiative aligns with other efforts to regulate the industry. Initially, bills A5336 and S4447 aimed to ban betting on political events and death, but those regulatory attempts were abandoned, with the focus now on taxation. Recently, Kalshi obtained a preliminary injunction against New Jersey as the state attempts to shut down event contracts it views as gambling. If prediction markets are ever regulated under gambling laws like sportsbooks, they could face a tax rate of around 20%.