New Jersey mulls a 9% tax on prediction markets

• New Jersey mulls a 9% tax on prediction markets, with previous provisions focusing on tighter regulation dropped
• Originally, S4447 and A5336 also sought to restrict certain event contracts and even introduce rules around prediction market platforms similar to how sportsbooks are regulated
• Collecting tax revenue from the platforms seems to remain a key focus for lawmakers

The debate around how to address the prediction market phenomenon is a popular one. Just what are prediction market platforms? A financial product, a way to skirt gambling regulation, or something else entirely?

New Jersey focuses on taxing prediction markets - not regulating them

While debates rage on, New Jersey’s lawmakers are looking to pass a new 9% tax on income earned by companies from prediction markets. However, the law specifically targets operators, and not consumers.

On June 28, 2026, the Senate Budget and Appropriations Committee greenlit S4447 sponsored by Senate President Nicholas Scutari and Sen Paul Sarlo. The bill passed with a 9-4 vote.

Essentially, the bill allows the tax to be collected from operator’s fees and revenue from prediction markets, but not the total volume of event contracts traded, which seems to be logical and to follow market dynamics.

Paulo Sarlo. Meanwhile, an Assembly Bill, A5336, sponsored by Assembly Speaker Craig Couglin, and Assembly members Linda Carter, William Moen, and Eliana Pintor Marin, is also looking to muster support for the proposal.

Both bills have been cleared in the respective committees, but would need to be cross-examined and verified, with the final task of potentially signing them into law falling on Gov. Mikkie Sherrill.

A small price to pay

Not much else is known about potential regulatory attempts on prediction markets so far in New Jersey.

The latest initiative runs parallel to various other attempts to regulate the sector. The original A5336 and S4447 also wanted to prohibit betting on political events and death, but attempts to regulate the sector were dropped, with the focus shifting purely on taxation.

Kalshi has recently secured a preliminary injunction against New Jersey as the Garden State seeks to force the platform to shutter event contracts that it considers to be a form of gambling.

Should prediction markets ever be regulated under gambling laws, in the case of sportsbooks, they would have to pay close to 20%.

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