Prediction markets may offer a tax loophole for gamblers under Trump’s Big Beautiful Bill, Coinbase says

A 2026 tax rule in the One Big Beautiful Bill Act will limit how gamblers deduct losses against winnings, Coinbase says, with prediction markets perhaps offering more favorable tax treatment due to their structure as financial contracts akin to derivatives. (Aidan Howe/Unsplash) Coinbase expects prediction markets to become key crypto infrastructure, despite current fragmentation and regulatory uncertainty. A change to U.S. tax rules tucked inside U.S. President Donald Trump's One Big Beautiful Bill Act could shift speculative activity toward blockchain-based prediction markets, according to Coinbase Institutional’s Crypto Market Outlook 2026. “Starting in 2026, a provision in the One Big Beautiful Bill Act... will limit the deduction for gambling losses against winnings,” David Duong, Coinbase’s head of institutional research, wrote in the report released on Friday. STORY CONTINUES BELOW No te pierdas otra historia.Suscríbete al boletín de Crypto Daybook Americas hoy. Ver todos los boletines The tax change carries broad implications for gamblers, including those active in sportsbooks, poker, or trading markets with similar risk profiles, as it will tax gamblers on wins that they didn't actually profit from. “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. AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy. As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M. GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month. Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B. Shares of the bitcoin miner jumped higher last week on its $7 billion...

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