Across different jurisdictions, the tax implications of prediction market earnings differ substantially, influenced by trading volume, whether it constitutes your primary source of revenue, and your country's stance on stablecoin transactions. This overview outlines the principal regulations — you should always speak with a qualified tax adviser in your region before making decisions.
United States
- Most prediction market platforms restrict access from the US (Polymarket applies geo-blocking) — though blockchain-based activity remains technically available
- The IRS classifies crypto holdings as property; every USDC transaction may trigger a taxable event
- Earnings from prediction markets are generally taxed as short-term capital gains (at ordinary income rates if held fewer than 12 months)
- Kalshi (regulated by the CFTC) generates 1099 forms; decentralised platforms do not — you must report manually
- Active traders may be eligible for trader status designation (allowing mark-to-market treatment)
United Kingdom
- A gambling exemption may apply: returns could be exempt if the activity qualifies as gambling
- If treated as an investment, capital gains tax applies: the £3,000 annual allowance applies in 2026
- Income-level trading activity counts as professional trading — National Insurance contributions may be due
- HMRC guidance on prediction markets remains non-specific and unresolved
Germany
- Under §23 EStG: private transaction profits below €600 annually escape taxation
- Holding USDC beyond one year: profits may be exempt under German cryptocurrency tax law
- High-frequency trading typically results in ordinary income classification
- Glücksspielgewinne (gaming winnings) ordinarily carry no tax burden — but the status of prediction markets remains ambiguous
Australia
- The ATO views crypto as a capital asset: gains are subject to capital gains tax upon sale
- A 50% reduction in CGT applies when holdings exceed 12 months
- Gaming profits are ordinarily not taxed unless you operate as a professional gaming business
Best Practices Globally
- Export your full transaction log from PolyGram to support tax filings
- Leverage crypto accounting tools (Koinly, CoinTracking) to determine your gains and losses
- Maintain documentation for every USDC movement, including entry and exit points
- Engage a tax specialist with crypto expertise in your country
FAQ
- Does PolyGram report my earnings to tax authorities?
- PolyGram currently does not furnish tax documentation to its users. Self-reporting of prediction market earnings is your responsibility under your local tax rules.
- Is USDC treated differently from volatile crypto for tax?
- Across most jurisdictions, USDC remains classified as a cryptographic asset and follows the same taxation rules as BTC or ETH. Though its price stability makes gain computation easier, the underlying tax framework remains unchanged.
- What records should I keep?
- Retain documentation of every transaction including the date, size, entry and exit prices, and settlement details. PolyGram allows you to download your transaction history — save copies on a regular schedule.