New York Judge Rejects Kalshi Bid to Block Gambling Laws as IRS Offers 0 Tax Guidance
Updated
Updated · CNBC · Jul 18
New York Judge Rejects Kalshi Bid to Block Gambling Laws as IRS Offers 0 Tax Guidance
2 articles · Updated · CNBC · Jul 18
Summary
Earlier this month, a New York federal judge refused to stop New York from enforcing state gambling laws against Kalshi’s sports-related event contracts, a setback for the prediction-market platform.
0 IRS guidance on prediction-market taxes has left traders and advisers split over whether winnings should be treated as gambling income, capital gains or Section 1256 contracts.
90% is the new cap on gambling-loss deductions under Trump’s tax law, meaning a trader with $100 of wins and $100 of losses could still owe tax on $10.
May’s launch of Kalshi perpetual futures adds another layer of uncertainty because contracts without expiration dates may be taxed differently from standard event contracts.
States are pressing illegal-sports-betting claims while the CFTC asserts exclusive jurisdiction over event contracts, leaving tax policy tangled with the broader regulatory fight.