A 5336 New Jersey General Assembly · 2026-2027 Regular Session

Establishes surtax on certain incomes derived from operation of prediction markets.*

This New Jersey bill introduces a 9 percent surtax on income generated by prediction markets, affecting both the companies that run these platforms and the individuals who earn money from them. The law defines prediction markets as systems where people bet on the outcomes of future events, such as elections, sports games, or entertainment releases, and applies to operators starting July 1, 2025, while taxing individual earnings beginning January 1, 2026. Under the new rules, these taxes are calculated on net income for businesses and gross income for individuals, with very limited options for tax credits available to offset the liability.

Issues: ✓ Budget & Taxes

Bill status in committee 1 of 4 stages cleared

Introduction

Jun 2026

Committee Review

Floor Vote

Governor

Introduced Jun 28, 2026 Last action Jun 28, 2026

Maddy AI version diff · 1 comparison

What changed between versions

Introduced → Assembly Committee Substitute · 8 edits

MODERATE

The Assembly Committee Substitute completely replaced the original bill's comprehensive regulatory framework with a simple tax measure. The introduced version prohibited certain prediction markets, created a licensing system for athletic event markets, imposed criminal and civil penalties, and restricted public officials from placing bets. The substitute strips all of that away and instead imposes a 9 percent surtax on the income of prediction market operators under both the corporate business tax and the gross income tax.

Scope change

The bill's scope narrowed dramatically from a comprehensive regulatory act covering prohibitions, licensing, enforcement, ethics restrictions, and taxation of prediction markets to a purely fiscal measure imposing a 9 percent surtax on prediction market operator income under two existing tax statutes.

SCOPE

The entire regulatory framework was removed: prohibitions on death markets, catastrophic event markets, and political markets; requirements for settlement source disclosure; anti-fraud and manipulation measures; and the athletic event market operator licensing system.

ENFORCEMENT

All criminal penalties (fourth degree crimes for operating without approval, for officials placing bets) and civil penalties ($1 million per day for continuing to operate after an injunction) were removed.

REQUIREMENT

Restrictions on state officers, local government employees, legislators, and candidates from opening speculative positions on political markets or markets related to their official duties were removed, along with the five-year post-employment restriction on working with athletic event market operators.

FISCAL

The original 10 percent surcharge on non-athletic prediction markets and the combined 19.75 percent tax plus 10 percent surcharge on athletic event markets were removed.

A 9 percent surtax on allocated taxable net income of prediction market operators was added under the Corporation Business Tax Act (C.54:10A-5), effective for privilege periods beginning on and after July 1, 2025.

A 9 percent surtax on gross income derived from operating a prediction market was added under the New Jersey Gross Income Tax Act (N.J.S.54A:1-1 et seq.), effective for taxable years beginning on and after January 1, 2026.

DEFINITION

Definitions were simplified. The original defined athletic event markets, catastrophic event markets, death markets, political markets, participants, prediction market platforms, and settlement sources. The substitute defines only prediction market, prediction market operator, future events, bid-ask format, and speculative position.

TIMELINE

The original bill took effect 30 days after enactment. The substitute takes effect immediately, with the corporate surtax applying retroactively to privilege periods beginning July 1, 2025, and the individual surtax applying to taxable years beginning January 1, 2026.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Jun 28, 2026

Introduced

Introduced, Referred to Assembly Budget Committee

lower

3 primary · 1 co-sponsor