Prediction Market
A marketplace where participants trade contracts on the outcomes of future events, priced by probability.
A prediction market is a financial marketplace where participants trade contracts based on the outcome of future events. Contracts are priced between $0 and $1, with the price reflecting the market's collective estimate of the event's probability.
Major U.S. prediction market platforms
- Kalshi — CFTC-regulated, event contracts on politics, economics, weather, and more
- Polymarket — Crypto-based (Polygon blockchain), popular for political and news events
- Robinhood — Recently added event contracts alongside stocks and crypto
- DraftKings — Sports-focused prediction markets alongside daily fantasy
- Interactive Brokers (ForecastEx) — CFTC-regulated, targeting institutional traders
Tax implications
Prediction market profits are taxable in the United States. The IRS has not issued specific guidance on how to classify prediction market income, leading to four defensible tax treatment methods. The platform you trade on affects which methods are available — CFTC-regulated platforms have more options than unregulated ones.
Growth
Prediction markets have grown dramatically, with combined volumes reaching billions of dollars during the 2024 U.S. presidential election. As more people trade, tax compliance becomes increasingly important.
Calculate your prediction market taxes
Import trades from Kalshi, Polymarket, Robinhood & more. See your P&L and compare tax methods — free.
Import Trades →Free · No account required
Related Terms
Why traders trust us
IRS-compliant forms
Form 8949, Schedule D, Form 6781
All 4 tax methods
Compare side-by-side with real numbers
FIFO cost basis
IRS default, calculated automatically
No data stored
Everything runs in your browser
Calculate your taxes
Import trades from Kalshi, Polymarket, Robinhood & more. Free P&L + tax comparison.
Import Trades →Free · No account required
Supported Platforms