WagerMintsKalshi and prediction markets in Nebraska: taxes and legal status
Nebraska taxes gambling winnings and prediction market profits as income (Up to 5.20%). Gambling losses only reduce your state tax if you itemize, and only up to your winnings.
As of October 27, 2026, we found no Nebraska lawsuit, order, law or official warning about prediction markets such as Kalshi, Polymarket US, Robinhood, Coinbase or Crypto.com. Where it stands
Checked October 27, 2026 against Nebraska’s tax department, court dockets and regulator records.
Nebraska at a glance
- Income tax
- Up to 5.20%
- Gambling losses
- Only if you itemize
- 2026 federal 90% rule
- Follows it
- Prediction markets
- No state action found
Income tax
How does Nebraska tax gambling and prediction market winnings?
Nebraska's top rate for 2025 is 5.20% on taxable income above $77,760 (single). The top rate is scheduled to fall to 4.55% for 2026 and 3.99% from 2027.
Nebraska taxes short-term trading gains as ordinary income at the regular graduated rates.
Gambling losses
Can you deduct gambling losses in Nebraska?
Nebraska has no separate gambling loss rule. Losses count only if you itemize on your federal return, because Nebraska itemized deductions are built from federal Schedule A.
- Nebraska taxes gambling winnings. Lottery prizes count as Nebraska-source income for nonresidents.
- Your Nebraska choice must match your federal choice. If you took the federal standard deduction, you take the Nebraska standard deduction. If you itemized federally, you get the larger of the Nebraska standard deduction or your federal itemized deductions minus state and local income taxes.
- Nebraska itemized deductions come straight from federal Schedule A, so the federal 90% limit on gambling losses carries through from 2026.
Legal status
Is prediction market trading legal in Nebraska?
As of October 27, 2026, we found no Nebraska lawsuit, order, law or official warning about prediction markets such as Kalshi, Polymarket US, Robinhood, Coinbase or Crypto.com. No federal case naming a prediction market operator involves Nebraska.
Federal courts
What the federal courts and the CFTC have said
States say prediction market sports contracts are bets that their gambling laws cover, while Kalshi and the CFTC say they are swaps, a kind of derivative that only the federal Commodity Exchange Act and the CFTC regulate. The Third Circuit appeals court sided with Kalshi against New Jersey in April 2026, while the Ninth Circuit (Nevada, August 2026) and the Sixth Circuit (Ohio and Tennessee, September 2026) ruled for the states, all at the preliminary stage. The Fourth Circuit (Maryland) heard argument in May 2026 and had not ruled as of October 27. New Jersey's petition to the Supreme Court, Flaherty v. KalshiEX (No. 26-299), is waiting on Kalshi's response due November 9, 2026, and the Court has not yet said whether it will hear the case. On October 9, 2026 the CFTC proposed a rule defining event contracts as swaps.
Apr 6, 2026
Court · U.S. Court of Appeals for the Third Circuit · KalshiEX LLC v. Flaherty (No. 25-1922)
By a 2-1 vote, the appeals court for New Jersey, Pennsylvania and Delaware upheld an order that stops New Jersey from enforcing its gambling laws against Kalshi's sports contracts for now. It found Kalshi likely to win its argument that federal law overrides the state. This is a preliminary ruling, not a final judgment.
Third Circuit opinion, Apr. 6, 2026Aug 28, 2026
Court · U.S. Court of Appeals for the Ninth Circuit · KalshiEX LLC v. Assad (No. 25-7516)
A unanimous three-judge panel upheld the order that lifted Kalshi's protection against Nevada, so Nevada may enforce its gambling laws against Kalshi's sports contracts. The court held that sports contracts are not swaps under federal law. It sent Kalshi's election contracts back to the district court. This is a preliminary ruling.
Ninth Circuit opinion, Aug. 28, 2026Sep 2, 2026
Court · Supreme Court of the United States · Flaherty v. KalshiEX, LLC (No. 26-299)
New Jersey asked the Supreme Court to review the Third Circuit ruling. Kalshi's response is due November 9, 2026 after an extension. Many states, tribes, the NFL and others have filed friend-of-the-court briefs. The Court has not decided whether to take the case.
Supreme Court docket No. 26-299Sep 16, 2026
Court · U.S. Court of Appeals for the Ninth Circuit · Blue Lake Rancheria v. Kalshi, Inc. (No. 25-7504)
In a case brought by two California tribes, the court held the tribes are likely to win their claim that Kalshi's sports contracts offered on tribal lands break the federal Indian Gaming Regulatory Act, and sent the case back to the lower court. A Lanham Act (false advertising) claim was rejected.
Ninth Circuit opinion, Sept. 16, 2026Sep 25, 2026
Court · U.S. Court of Appeals for the Sixth Circuit · KalshiEX LLC v. Schuler (Ohio) and KalshiEX LLC v. Orgel (Tennessee) (Nos. 26-3196 and 26-5235)
A unanimous panel upheld a federal judge's refusal to block Ohio's gambling laws and threw out the order that had protected Kalshi in Tennessee. It held Kalshi's sports contracts are not swaps and, even if they were, federal law does not override the states' gambling laws. The cases go back to the lower courts.
Sixth Circuit opinion, Sept. 25, 2026Oct 9, 2026
Regulator · Commodity Futures Trading Commission
The CFTC proposed a rule that would expressly define event contracts, including those on sports, politics, culture and weather, as swaps, which would place them under federal rather than state oversight. The public may comment for 30 days after Federal Register publication (91 FR 66022). It is a proposal, not a final rule. The same day the CFTC issued an interim rule excluding casino-style gambling products, such as sportsbook wagers and casino games, from the swap definition (91 FR 65969).
CFTC press release 9310-26, Oct. 9, 2026Oct 26, 2026
Court · U.S. Court of Appeals for the Fourth Circuit · KalshiEX LLC v. Martin (Maryland) (No. 25-1892)
No ruling yet. The appeal was argued May 7, 2026 and the parties were still filing supplemental authorities on Oct. 26, 2026.
CourtListener docket, Fourth Circuit No. 25-1892
Your trades
Kalshi and Polymarket profits in Nebraska
The IRS hasn’t said how prediction market trades are taxed, so you pick one of four federal methods: capital gains, ordinary income, gambling or Section 1256. Nebraska starts from your federal figures, so the method you choose federally generally carries onto your state return. If you report as gambling, the loss rules above apply. The four methods, compared.
Questions
Questions about Nebraska
- Does Nebraska tax gambling winnings?
- Nebraska taxes gambling winnings and prediction market profits as income (Up to 5.20%). Gambling losses only reduce your state tax if you itemize, and only up to your winnings.
- Can I deduct gambling losses in Nebraska?
- Nebraska has no separate gambling loss rule. Losses count only if you itemize on your federal return, because Nebraska itemized deductions are built from federal Schedule A.
- Is Kalshi legal in Nebraska?
- As of October 27, 2026, we found no Nebraska lawsuit, order, law or official warning about prediction markets such as Kalshi, Polymarket US, Robinhood, Coinbase or Crypto.com. No federal case naming a prediction market operator involves Nebraska.
- Does the court fight change how my trades are taxed?
- No. These cases decide whether a state can license or stop the platforms. None of them decides how your trades are taxed, and trades you already made still count in your tax year.
States with the same rule on losses: New Mexico, New York, North Carolina, North Dakota, Oregon, South Carolina. All states.
Tax facts checked against Nebraska’s own tax pages on October 26, 2026; legal status on October 27, 2026. Rules and cases change, so confirm with current instructions before you file.
See your own year four ways
WagerMints prices your Kalshi or Polymarket year under all four federal methods, side by side, so you can see what Nebraska is taxing before you file. Free, no account.
Run your report