Prediction markets may offer tax loophole for gamblers under Trump’s Big Beautiful Bill, Coinbase says
Coinbase suggests prediction markets could offer a tax advantage over traditional gambling due to changes in the One Big Beautiful Bill Act.Summary
Coinbase Institutional's Crypto Market Outlook 2026 suggests that a tax provision in President Trump's One Big Beautiful Bill Act, set to take effect in 2026, could create a tax loophole favoring blockchain-based prediction markets. This provision will limit the deduction of gambling losses against winnings, effectively taxing gamblers on wins even if they haven't realized a net profit across all activities. David Duong, Coinbase's head of institutional research, noted that prediction markets, which use financial contracts similar to derivatives, might become a more tax-advantageous substitute for traditional sportsbooks and casinos under this new regime. Beyond tax benefits, Coinbase views prediction markets as a growing pillar of the onchain economy, anticipating the rise of aggregators to consolidate liquidity and standards as the sector matures, despite lingering regulatory uncertainty.
(Source：CoinDesk)