Prediction Market Legislation Advances Across Multiple States During 2026 Sessions

At least fifteen states took up prediction market legislation during the 2026 legislative year, and six of those states moved forward with enacted laws that introduced taxes on operators along with various regulatory controls. Kentucky established a 14.25 percent excise tax on operators while North Carolina imposed a 6 percent tax on trading fees, and Connecticut directed resources toward formal studies of the sector. Minnesota enacted prohibitions on certain activities and participants, and additional states focused on age limits, taxes tied to sports-related wagers, and integrity measures designed to protect market operations.

Scope of State-Level Action in 2026

Legislatures across the country addressed prediction markets through a combination of tax frameworks, study requirements, and participant restrictions, and the National Conference of State Legislatures tracked these developments in its 2026 report. Bills ranged from outright prohibitions in Hawaii and North Carolina to targeted taxes and oversight rules in other jurisdictions, while the overall pattern showed states experimenting with different approaches to regulation. By July 2026 many of these measures had progressed through committee review or final passage, and observers noted that teh diversity of proposals reflected varying state priorities around revenue generation and consumer protection.

Tax Provisions Enacted by Six States

Six states completed legislation that placed new financial obligations on prediction market operators, and Kentucky's 14.25 percent excise tax stands as one of the more substantial rates adopted during the session. North Carolina paired its 6 percent trading fee tax with additional reporting requirements, and these measures aimed to capture revenue from platform activity without halting market operations. Connecticut chose a study-based path that directs state agencies to examine tax models and market impacts before final rules take shape, while other enacted laws incorporated taxes on sports-related wagers and integrity provisions that require operators to maintain audit trails and conflict-of-interest safeguards. These tax structures connect directly to broader efforts to balance state budgets with the growth of prediction markets, and data compiled by the NCSL shows how individual states calibrated rates to local economic conditions.

Prohibitions and Ban Proposals

Hawaii and North Carolina introduced bills that sought to ban or prohibit prediction markets entirely, and these proposals highlighted concerns over market integrity and participant eligibility. Minnesota's enacted prohibitions targeted specific activities and participant categories, creating clear boundaries around who may operate or engage in these markets. Other states considered age-limit restrictions that would align prediction market participation with existing gambling statutes, and these measures often appeared alongside integrity requirements that mandate background checks and transaction monitoring. The NCSL report documents how prohibition efforts coexisted with more permissive tax-and-regulate frameworks, and the contrast illustrates the range of policy options under active consideration during the 2026 sessions.

Additional Regulatory Measures

Beyond taxes and bans, states introduced integrity measures that require operators to implement safeguards against manipulation and unauthorized access, and several legislatures tied these requirements to sports-related wager taxes. Age limits emerged as a common feature across multiple bills, ensuring that participants meet minimum thresholds consistent with other forms of regulated wagering. Connecticut's study directive represents another approach that gathers data before permanent rules are set, and this method allows lawmakers to assess potential revenue and risk factors over time. The NCSL compilation reveals that these varied provisions often appeared together in single bills, creating layered regulatory systems rather than isolated rules.

Patterns Across the Fifteen States

The fifteen states that addressed prediction market legislation demonstrated both convergence and divergence in their proposals, and common themes included revenue collection through excise or fee taxes alongside participant protections. States that enacted laws tended to combine financial obligations with operational standards, whereas those pursuing prohibitions focused on limiting market access altogether. By mid-2026 the legislative record showed that six states had completed the enactment process while others continued to refine bills through amendments or additional hearings. This distribution of outcomes underscores how states adapted general concepts to specific fiscal and regulatory environments without a uniform national template.

Conclusion

The 2026 legislative year produced a clear record of state engagement with prediction market policy, and the six enacted laws alongside the prohibition proposals illustrate the range of approaches under consideration. Taxes in Kentucky and North Carolina, studies in Connecticut, and restrictions in Minnesota represent concrete outcomes that will shape market operations in those jurisdictions. Additional measures addressing age limits, sports-wager taxes, and integrity standards further define the regulatory landscape, and continued tracking by organizations such as the National Conference of State Legislatures will document how these rules evolve in subsequent sessions.