IRS has not issued tax guidance on prediction market winnings

According to CNBC, the Internal Revenue Service has not yet provided guidance on the federal tax treatment of prediction market winnings and losses, even as the market grows in popularity. Tax experts said those winnings could be treated as gambling income, capital gains or Section 1256 contracts, and noted that President Donald Trump's One Big Beautiful Bill Act now caps gambling loss deductions at 90%. The article said Kalshi introduced perpetual futures in May, which could face different tax treatment because they have no expiration date. It also said the Commodity Futures Trading Commission argues that event contracts fall under its jurisdiction as swaps, while a New York federal judge earlier this month rejected Kalshi's bid to block New York from enforcing its gambling laws on sports-related event contracts.