N.J. committees advance 9% prediction market tax bills for fall return
New Jersey's Senate and Assembly budget committees approved companion bills on July 7 that would impose a 9% tax on prediction market wagers, sending the legislation to full chamber votes for sports and election betting. The proposal had failed to clear floor votes before lawmakers broke for recess, but the NJ Assembly speaker said it will return in the fall. The bills target operators including Polymarket and Kalshi.
Polymarket and Kalshi now face a widening tax map that already includes Illinois, Kentucky, and North Carolina. A 9% New Jersey levy would layer onto that stack, compounding state-by-state costs that CFTC registration was meant to prevent. Each new state that taxes without licensing erodes the margin advantage federal registration once promised. The income-based structure taxes profit rather than turnover, sparing money-losing markets but exposing successful verticals to a persistent haircut.
For operators, the preemption argument they are testing in Illinois and Kentucky becomes harder to sustain with every additional state statute on the books. Platforms without government-affairs teams in Trenton will struggle to shape amendments before final passage. A signed New Jersey law would signal that governors are willing to green-light these taxes as budget balancers, inviting more states to copy the mix. The fight is now less about any single rate and more about whether the preemption shield can cap conflicting state claims before the stack reaches a half-dozen jurisdictions.