Matthew Pertz, “Kentucky Lawmakers Enact Excise Tax on Prediction Markets” (Tax Notes, April 27, 2026):

Kentucky Republicans have overridden another of Democratic Gov. Andy Beshear’s vetoes, this time of a sweeping tax bill that taxes prediction markets.

Lawmakers enacted the revenue omnibus bill, H.B. 757, on April 14, just one day after Beshear’s line-item vetoes, with a House override vote of 66–18 and a Senate vote of 31–5.

The bill institutes an excise tax on prediction markets like Kalshi and Polymarket. These platforms, which lawmakers say operate like sports gambling platforms, will face a 14.25 percent excise tax on their transaction fees. Because prediction markets are structured as participants betting on future events against other participants (not betting against a house, as in sportsbooks), the tax will apply to the transaction fees collected by a prediction market. A separate bill, H.B. 904, was also enacted April 14 over the governor’s veto and prohibits sportsbooks from launching prediction-like markets.