New Jersey’s proposal to tax prediction markets will return in the fall after lawmakers paused the bill before their summer recess, Assembly Speaker Craig Coughlin said on July 7, citing concerns that late amendments could affect other financial instruments.
The bill would impose a 9% surtax on prediction market operators’ net income. Both chambers’ budget committees advanced the measure in party-line votes before the June 30 voting sessions that capped the budget season, but it did not clear full floor votes in either chamber.
Coughlin, the bill’s prime sponsor in the Assembly, said lawmakers would review the proposal over the summer. “We’re planning on looking at that over the summer and into the fall. I think there’s every chance we’ll pass something out. We’ll make sure it’s right,” he told the New Jersey Monitor.
The hesitation centered on a revised version of the bill from top Senate Democrats. The original proposal would have imposed a 10% surcharge on nearly all contracts offered by prediction markets, including sports contracts that would also be subject to New Jersey’s regular 19.75% internet sports betting tax. Coughlin said concerns emerged that the amended version “might be affecting other things, like the stock market or something like that. Clearly that was never the intent.”
Prediction market volumes have surged dramatically in 2026. Kalshi and Polymarket recorded $60 billion in combined trading volume year-to-date as of early July, according to reporting from the Press of Atlantic City. The monthly trading volume across both platforms rose from under $5 billion in September 2025 to roughly $24 billion by April 2026, according to data cited by MetaMask and Pew Research Center.
The regulatory landscape for prediction markets has shifted in recent months. In April, a three-judge panel of the U.S. 3rd Circuit Court of Appeals ruled that Kalshi’s sports wagering contracts qualify as futures trades under federal authority, not state gambling law. The decision gave federal regulators—specifically the Commodity Futures Trading Commission—exclusive jurisdiction. In June, the CFTC proposed new rules that would largely allow sports-related prediction market contracts while targeting contracts deemed prone to insider trading.
Despite the federal clarity, states including New Jersey have moved to impose their own taxes and regulations. The state’s Office of Legislative Services estimated the 9% surtax could generate between $10.3 million and $15.3 million in the current fiscal year, though analysts cautioned against extrapolating those figures to future years, citing the novelty of the market and the possibility that prediction markets could cannibalize casino and sportsbook revenues.
Opposition has come from Atlantic City casino workers. Donna DeCaprio, president of UNITE HERE Local 54, told the Assembly Budget Committee in June that prediction markets posed an “existential threat” to casino jobs and that taxing them would legitimize rather than constrain the platforms. She also noted that prediction markets allow customers as young as 18, while New Jersey’s legal gambling age is 21.
Sources
- New Jersey Monitor — Coughlin’s statement that the prediction market tax proposal will return in the fall, details on the bill’s 9% surtax and the Senate amendments that caused lawmakers to pause it, and the fiscal note estimates.
- Press of Atlantic City — Prediction market volume figures ($60B year-to-date for Kalshi and Polymarket) and Coughlin’s statement on the fall return.
- MetaMask — Monthly trading volume data showing growth from under $5B in September 2025 to roughly $24B by April 2026.
- Pew Research Center — Confirmation of monthly trading volume rise from under $5B to nearly $24B in April 2026.
- U.S. 3rd Circuit Court of Appeals — April 2026 ruling that Kalshi’s sports wagering contracts are CFTC-regulated futures.
- CFTC — June 2026 proposed rules allowing sports-related prediction market contracts while targeting insider-prone trades.
