How to Trade in California
Everything a California resident needs to go from zero to placing their first prediction market trade — and what to know about taxes when you start winning.
Prediction markets aren't sportsbooks. Contracts trade between traders, prices represent real probabilities, and you can sell your position at any time — even mid-game. With traditional online sports betting still illegal in California after the 2022 ballot propositions failed, federally-regulated event contracts are the legal path in.
California does tax winnings as state income (1%–13.3%), so the tax math matters more here than in zero-income-tax states. Below are the two guides that get every new California trader started right.
Beginner's Guide: How Prediction Markets Work (For California Traders)
A plain-English guide to prediction markets for Californians — what they are, how they differ from Kalshi, and how to make your first trade.
Pillar pages
Frequently asked questions
Sources & references
- 1.Commodity Futures Trading Commission — Event Contracts — CFTC.gov
- 2.IRS — Topic No. 419, Gambling Income and Losses — IRS.gov
- 3.IRS — About Form 1099-MISC — IRS.gov
- 4.National Council on Problem Gambling — 1-800-GAMBLER — NCPG
External links open in a new tab. We cite primary regulatory and major news sources where possible. Citations to trusted regulators (CFTC, SEC, IRS, NOAA, .gov, .edu) are dofollow; commercial outbound links are not endorsements.