Kalshi and prediction markets in Oregon: taxes and legal status

For 2025, Oregon's rates are 4.75%, 6.75%, 8.75% and 9.9%. The 9.9% rate applies to taxable income over $125,000 for single filers and over $250,000 for joint filers.

Portland-area local taxes can also reach this income. Multnomah County's Preschool for All tax is 1.5% on Oregon taxable income above $125,000 for single filers and $200,000 for joint filers, plus a further 1.5% above $250,000 and $400,000. The Metro Supportive Housing Services tax is 1%.

Short-term gains are taxed like other income at the regular Oregon rates.

Oregon allows gambling losses as an itemized deduction on Schedule OR-A, line 22 (other miscellaneous deductions), up to your taxable winnings. If you subtract untaxed Oregon Lottery winnings on Schedule OR-ASC, you must add back the matching part of the loss deduction.

• Oregon taxes gambling winnings from all sources. Oregon Lottery winnings of $600 or less from a single ticket or play are not taxed. Nonresidents are taxed on single-ticket Oregon Lottery winnings above $600.
• Oregon gives you the larger of its itemized deductions or its standard deduction, using federal definitions and limitations with listed changes. The Oregon standard deduction is zero if you are married filing separately and your spouse itemizes.
• The Oregon Lottery withholds 8% for state tax on prizes of $1,500 or more paid to individuals (ORS 316.194, as amended by S.B. 251 in 2017).
• The 2025 Schedule OR-A instructions still say losses are allowed up to your taxable winnings, and no Oregon statement addresses the federal 90% limit for 2026.

As of October 27, 2026, we found no Oregon lawsuit, order or letter aimed at Kalshi, Polymarket or other prediction market platforms. A private suit against Kalshi filed in February 2026 ended on June 15, 2026.

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.

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. Oregon 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.