N.J. lawmakers advance bill to tax prediction market operators Polymarket and Kalshi
New Jersey lawmakers advanced legislation to tax prediction market operators on Tuesday, June 30. The bill specifically names Polymarket and Kalshi as the platforms it would affect. The nonpartisan Office of Legislative Services provided fiscal analysis on the measure, which moves forward amid broader state scrutiny of the sector. The companies operate as Commodity Futures Trading Commission (CFTC)-registered exchanges, letting users trade on outcomes of future events.
Kalshi and Polymarket now face the prospect of a fourth state tax or enforcement action alongside Illinois, Michigan, and Kentucky, each with its own rate and compliance rules. The New Jersey levy would add a direct cost layer that offshore competitors do not bear, squeezing margins on sports and political contracts that both platforms count on for volume. A patchwork of state tax regimes forces operators to build geofenced pricing and state-by-state revenue recognition rather than operate under uniform federal rules. The first platform to absorb multiple state taxes and still retain liquidity will set the playbook for the rest; the alternative is retreating from any state that imposes a levy, shrinking the regulated market exactly as CFTC rules are expanding what contracts it permits.