Prediction Markets May Offer a Tax Loophole For Gamblers Under Trump’s Big Beautiful Bill, Coinbase says

“Consequently, prediction markets, which utilize financial contracts akin to derivatives, could emerge as a more tax-advantageous substitute to traditional sportsbooks and casinos,” Duong wrote in the report, suggesting that the structure of event-based crypto markets may offer more favorable treatment under the updated tax regime.

Beyond the tax implications, Coinbase sees prediction markets emerging as a key pillar of the onchain economy as notional trading volume rose sharply in 2025. The firm predicts that these markets could evolve into essential infrastructure for crypto, offering real-time forecasting tools that rival traditional polling and financial indicators.

Still, Coinbase notes that the sector remains fragmented, with many protocols operating independently and lacking shared standards. The report anticipates the rise of prediction market aggregators — interfaces that consolidate odds and liquidity across platforms — as a next step in the sector’s maturation. While regulatory uncertainty lingers, Coinbase suggests that the demand for decentralized, censorship-resistant forecasting tools will continue to grow.