HB 2497 Filed: Pennsylvania Moves to Tax Prediction Markets at 22% Plus $1M License Fee
A bipartisan group of Democratic House members introduced HB 2497 in the Gaming Oversight Committee on May 8, proposing a 20% state tax, a 2% local-share assessment, and a $1 million annual license fee on prediction-market operators.
What Happened
House Bill 2497, referred to the Gaming Oversight Committee on May 8, 2026, would require federally regulated prediction-market platforms (Kalshi, Polymarket, others) to obtain a Pennsylvania license at $1 million per year, plus the same $1 million for annual renewal. Licensees would pay a 20% tax on gross revenue, plus a separate 2% local-share assessment that would fund public-interest grants. The bill also bans insider trading on contracts, raises the minimum trading age to 21, and allows the state to restrict sensitive contracts such as election-related markets. Operators continuing to take PA action without a license could be fined up to $25,000.
Background & Context
Prediction-market trading volume reached an estimated $44 billion in 2025, and the question of whether CFTC-regulated event contracts on Kalshi and similar exchanges fall under state gambling laws has now produced active court fights in Arizona (where Kalshi just won a preliminary injunction), New Jersey, Maryland and several other jurisdictions. HB 2497 is PA's attempt to regulate and tax these platforms rather than fight them; taking a similar posture to the state's historical approach to skill games.
What It Means for PA Bettors
For PA bettors who use Kalshi or similar platforms, the practical effect; if HB 2497 passes; would be a regulated PA market with operator accountability, age verification at 21, and consumer protections, in exchange for a tax burden passed through to users in the form of wider spreads. For PA's licensed sportsbooks, regulation of prediction markets removes the current "loophole" advantage those platforms hold. The bill faces a Third Circuit court fight on federal preemption grounds that may shape its final form.
Read Next
Stay Updated
For ongoing PA sports betting coverage, see our news index, our PA sportsbook reviews, and our PA betting laws guide.