Coinbase says Trump’s Big Beautiful Bill could push gamblers into arms of prediction markets
Tax-conscious gamblers may find solace in prediction markets next year, according to Coinbase."Starting in 2026, a provision in the One Big Beautiful Bill Act (signed in July 2025) will limit the deduction for gambling losses against winnings," the cryptocurrency exchange said in its 2026 outlook report released this week.Coinbase said the change, passed into law after President Trump signed the bill he'd made a key part of his agenda, could cause taxpayers to be taxed on "phantom" income even if their winnings are small and overall incurred a net loss."Consequently, prediction markets, which utilize financial contracts akin to derivatives, could emerge as a more tax-advantageous substitute to traditional sportsbooks and casinos," Coinbase also said.Of course, Coinbase advocating for prediction markets makes sense given the company has recently committed to giving its customers access to the newly popular form of gambling through a partnership with Kalshi.The top cryptocurrency exchange has also gone on the offensive, pushing back against state regulators eager to prohibit prediction markets from offering event contracts for sports.Coinbase is suing three U.S. states, Michigan, Illinois, and Connecticut, seeking court orders affirming that prediction markets fall under the exclusive jurisdiction of the Commodity Futures Trading Commission (CFTC) rather than state gaming regulators. The company argues Congress has already designated the CFTC as the sole regulator for prediction markets, meaning states don't have the authority to intervene.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.