{"data":{"id":"us-ky/krs-138.506","jurisdiction":"us-ky","citation":"KRS 138.506","heading":"Prediction market tax -- Definitions for section.  (Effective January 1,","body":"2027)\n(1) As used in this section:\n(a) \"Consumer\" means a:\n1. Kentucky resident who purchases an event contract through a prediction\nmarket; or\n2. Person who is not a Kentu cky resident who purchases an event contract\nthrough a prediction market while in Kentucky;\n(b) \"Department\" means the Department of Revenue;\n(c) \"Event contract\":\n1. Means an agreement, contract, transaction, or swap in an excluded\ncommodity based on the occurrence, extent of an occurrence, or\ncontingency other than a change in the price, rate, value, or levels of a\ncommodity described in 7 U.S.C. sec. 1a(19)(i), as amended; and\n2. Does not include:\na. Any contract of sale of a commodity for future delivery, or any\noption on such a contract, executed on or subject to the rules of a\ndesignated contract market; or\nb. Any swap or derivative based on:\ni. An agricultural commodity;\nii. An exempt commodity; or\niii. Any excluded commodity not subject to subparagraph 1. of\nthis paragraph, as the terms are defined in the Commodity\nExchange Act;\n(d) \"Person\" has the same meaning as in KRS 139.010;\n(e) \"Prediction market\":\n1. Means:\na. Any physical or electronic pla tform through which a consumer\nmay buy, sell, or exchange event contracts, whether the market is\nlocated in or out of the state; or\nb. Any platform or system that provides consumers with the ability to\nopen speculative positions on the outcomes of future events; and\n2. May be a board of trade designated as a contract market by the\nCommodity Futures Trading Commission;\n(f) \"Prediction market operator\":\n1. Means a board of trade or other person, including any affiliate of the\nperson, that operates a prediction market; and\n2. Includes but is not limited to a person that satisfies the requirements of\nthis subsection through the ownership, operation, or control of a digital\ndistribution service, digital distribution platform, online portal, or\napplication store where a prediction market may be accessed;\n(g) \"Speculative position\" means a financial commitment made by a consumer in\na prediction market; and\n(h) \"Transaction fee\" means:\n1. The fee charged by the prediction market operator to complete a sale,\npurchase, or trade of an event contract to a consumer; and\n2. The amount paid by a consumer to purchase an event contract from a\nprediction market operator.\n(2) On and after January 1, 2027, an excise tax is hereby imposed on a prediction\nmarket operator at the rate of fourteen and one -quarter percent (14.25%) of the\nprediction market operator's transaction fees. The accrual method of accounting\nshall be used for purposes of calculating the amount of tax owed by the prediction\nmarket operator under this subsection.\n(3) The tax imposed by subsection (2) of this section is due and payable monthly and\nshall be remitted to the department on or before the twentieth day of the next\nsucceeding calendar month.\n(4) The prediction market operator's payment shall be accompan ied by a return\nprescribed by the department indicating the amount of tax due for the previous\ncalendar month as well as any other information the department shall require\nthrough an administrative regulation promulgated in accordance with KRS Chapter\n13A.\n(5) Any prediction market operator who violates any provision of this section shall be\nsubject to the uniform civil penalties imposed under KRS 131.180.\n(6) In every case, any tax not paid on or before the due date shall bear interest at the tax\ninterest rate as defined in KRS 131.010 from the due date until the date of payment.","path":["KRS Chapter 138"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=58271","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:30Z","sha256":"5bd280a040aaa2f39a8b30c9fa14106cbf405917288337d62fa2d6092b1721fc","source_id":"us-ky","stale":false,"prev":"us-ky/krs-138.505","next":"us-ky/krs-138.507"},"notice":"GroundRules: Original legal text. Not legal advice."}