New Jersey lawmakers have introduced legislation that would establish a state regulatory framework for prediction markets, impose new taxes on sports event contracts and restrict several categories of event-based trading.
Senate Bill 4447, introduced by Sens. Nicholas Scutari and Paul Sarlo, would place prediction markets under the supervision of the New Jersey Division of Gaming Enforcement (DGE). The proposal comes as legal disputes continue over whether prediction market operators are regulated exclusively by the Commodity Futures Trading Commission (CFTC) under the Commodity Exchange Act (CEA).
The bill was referred to the Senate Budget and Appropriations Committee and has not yet been scheduled for a hearing.
New Taxes and Licensing Requirements
The legislation would allow sports event contracts only through operators approved by the DGE. Platforms offering such products would need a sports wagering license or authorization as an athletic event market operator.
Sports event contracts would face New Jersey’s existing 19.75% sports betting tax plus an additional 10% surcharge, creating a combined rate of 29.75%. General event contracts would be subject to a 10% surcharge.
The proposal also requires vendors serving licensed operators to obtain approval from the DGE. An initial athletic event market operator license would cost $5 million, with applicants covering investigative expenses.
Restrictions on Certain Markets
The legislation would prohibit several forms of event contracts, including political markets, death-related markets and contracts tied to catastrophic events.
“Each of these markets violate or encourage the violation of longstanding state policies that protect the health, safety, and welfare of the state’s citizens,” the bill states.
Lawmakers also included provisions aimed at political market participation. Current public officials, government employees, campaign staff and certain family members would be prohibited from trading political event contracts. Violators could face fines of up to $10,000, imprisonment of up to 18 months, or both.
The bill further states: “The bill requires all prediction markets to meet basic standards, including that the prediction markets disclose the source of information used to settle a market and take practical steps to limit potential manipulation, insider trading, or fraud in violation of State law.”
Enforcement and Ongoing Legal Disputes
Operators would have to implement responsible gaming measures, including age verification, self-exclusion programs, deposit limits and problem gambling resources. The bill would establish a minimum age of 21 for sports event contracts.
The attorney general would gain authority to seek injunctions against non-compliant operators. Violators could face fines of up to $1 million per day.
The proposal follows a recent court ruling involving Kalshi. After New Jersey issued cease-and-desist orders against the company, the US Court of Appeals for the Third Circuit ruled that Kalshi’s sports event contracts likely fall under federal jurisdiction through the CFTC and CEA.
New Jersey joins several states considering prediction market regulation, including Ohio and Pennsylvania, while Illinois and Kentucky have already approved tax measures affecting operators.
Source:
“New Jersey bill aims to regulate, tax prediction markets amid legal battle”, sbcamericas.com, Jun 17, 2026
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