The Oklahoma Bar Journal May 2026

have been mixed and 3) federal regulation does not make state law irrelevant. CONCLUSION Congress changed the after-tax economics of high-volume betting with one small amendment to §165(d). For some bettors, the new 90% limitation can create taxable income that exceeds economic profit. Event contracts complicate the picture, but they do not yet supply a settled answer on either tax characterization or preemp tion. Until the tax characterization and preemption questions are shown to be less volatile, practi tioners and clients alike should treat event contracts as an asset class worth watching – but per haps from a distance. Eischen Law Firm PLLC in 2025, where he practices in Fairview, principally in the areas of real property and estate planning. ENDNOTES 1. Pub. L. No. 119-21, §70114, 139 Stat. 72, 166 67 (July 4, 2025) (amending I.R.C. §165(d)) (effective for taxable years beginning after Dec. 31, 2025). 2. I.R.C. §165(d) (2024). 3. I.R.C. §§61(a), 63(d), 165(d) (2024). 4. Tax Cuts and Jobs Act, Pub. L. No. 115-97, §11050, 131 Stat. 2054, 2088-89 (2017); see also I.R.C. §165(d) (2024). 5. Tax Cuts and Jobs Act, Pub. L. No. 115-97, §11050, 131 Stat. 2054, 2088-89 (2017) (adding flush language to I.R.C. §165(d) for taxable years beginning after Dec. 31, 2017). 6. Pub. L. No. 115-97, §11050, 131 Stat. at 2089 (sunset provision); Pub. L. No. 119-21, §70114, 139 Stat. 72, 166-67 (2025) (extending and modifying limitation on wagering losses). 7. Pub. L. No. 119-21, §70114, 139 Stat. 72, 166-67 (2025) (amending I.R.C. §165(d) for taxable years beginning after Dec. 31, 2025). ABOUT THE AUTHOR Jay P. Eischen is a 2022 graduate of OSU and a 2025 graduate of Vanderbilt Law School. Mr. Eischen founded

8. I.R.C. §§63(c), (d), 165(d) (2024); I.R.S., Topic No. 419, Gambling Income and Losses (updated Oct. 3, 2025); I.R.S., 2025 Instructions for Schedule A (Form 1040), line 16 (2026). 9. Okla. Stat. tit. 68, §2353 (2025) (Oklahoma adjusted gross income); see also I.R.C. §63(d) (2024) (itemized deductions). 10. Okla. Stat. tit. 68, §2358(E)(3)(b) (2025). 11. Event Contracts, 89 Fed. Reg. 48968, 48970 (June 10, 2024) (describing event contracts as derivative contracts, typically with a binary payoff structure); KalshiEX LLC v. Flaherty , No. 25-cv-02152-ESK-MJS, 2025 WL 1218313, at *1 (D.N.J. April 28, 2025) (describing binary sports event contracts). 12. 7 U.S.C. §§1a(19)(iv), 1a(47)(A)(ii), 2(a)(1)(A), 7a-2(c)(5)(C) (2022); Event Contracts, 89 Fed. Reg. 48968, 48968-70 (June 10, 2024). 13. Event Contracts, 89 Fed. Reg. 48968, 48969-70 (June 10, 2024) (discussing event contracts listed by CFTC-registered exchanges); In re Blockratize, Inc. d/b/a Polymarket.com, CFTC Docket No. 22-09, Order, at 2-3 (Jan. 3, 2022); Commodity Futures Trading Comm’n, Press Release No. 8478-22, “CFTC Orders Polymarket to Pay $1.4 Million for Offering Illegal Off-Exchange Event-Based Binary Options Contracts and to Wind Down Markets,” (Jan. 3, 2022). 14. 7 U.S.C. §7a-2(c) (2022); 17 C.F.R. §§40.2, 40.3 (2025); In re Blockratize Inc. d/b/a Polymarket.com, CFTC Docket No. 22-09, Order, at 2-3 (Jan. 3, 2022). 15. 7 U.S.C. §7a-2(c) (2022); 17 C.F.R. §§40.2(a) (2), 40.11(c) (2025); Event Contracts, 89 Fed. Reg. 48968, 48972-73 (June 10, 2024). 16. Kalshi, Finding Markets, Help Center, https://bit.ly/4c0jMqr (last visited March 12). 17. 7 U.S.C. §7a-2(c)(5)(C) (2022); 17 C.F.R. §40.11 (2025). 18. Event Contracts, 89 Fed. Reg. 48968 (proposed June 10, 2024); Commodity Futures Trading Comm’n, Press Release No. 8907-24, “CFTC Issues Proposal on Event Contracts,” (May 10, 2024). 19. Event Contracts; Withdrawal of Proposed Regulatory Action, 91 Fed. Reg. 5386, 5386-87 (Feb. 6, 2026); Commodity Futures Trading Comm’n, Press Release No. 9179-26, “CFTC Withdraws Event Contracts Rule Proposal and Staff Sports Event Contracts Advisory,” (Feb. 4, 2026). 20. Commodity Futures Trading Comm’n, Press Release No. 9183-26, “CFTC Reaffirms Exclusive Jurisdiction over Prediction Markets in U.S. Circuit Court Filing,” (Feb. 17, 2026); Amicus Brief of Commodity Futures Trading Commission, N. Am. Derivatives Exch ., Inc. v. State of Nevada , No. 25-7187 (9th Cir. Feb. 17, 2026). 21. Commodity Futures Trading Comm’n, Press Release No. 8780-23, “CFTC Disapproves KalshiEX LLC’s Congressional Control Contracts,” (Sept. 22, 2023); KalshiEX LLC v. Commodity Futures Trading Comm’n , No. 23-cv-03257 (JMC), 2024 WL 4164694 (D.D.C. Sept. 12, 2024); KalshiEX LLC v. Commodity Futures Trading Comm’n , 119 F.4th 58 (D.C. Cir. 2024) (denying stay); KalshiEX LLC v. Commodity Futures Trading Comm’n , No. 24-5205, 2025 WL 1349979 (D.C. Cir. May 7, 2025) (granting unopposed motion for voluntary dismissal). 22. KalshiEX LLC v. Flaherty , No. 25-cv-02152 ESK-MJS, 2025 WL 1218313, at *4-7 (D.N.J. April 28, 2025) (granting preliminary injunction); KalshiEX LLC v. Martin , No. 25-cv-1283-ABA, 2025 WL 2194908, at *1, *5-13 (D. Md. Aug. 1, 2025)

(describing Jan. 24, 2025, self-certification and April 7, 2025, cease and desist letter; denying preliminary injunction); KalshiEX LLC v. Hendrick , No. 2:25-cv-00575-APG-BNW, 2025 WL 3286282 (D. Nev. Nov. 24, 2025) (dissolving preliminary injunction). 23. I.R.C. §165(d) (as amended by Pub. L. No. 119-21, §70114, 139 Stat. 72, 166-67 (2025)). 24. I.R.C. §1256(a), (b) (2024). 25. I.R.C. §§1211(b), 1212(b), 1212(c), 1256 (2024). 26. I.R.C. §§1211(b), 1212(b) (2024); cf. I.R.C. §165(d) (as amended). 27. 7 U.S.C. §2(a)(1)(A) (2022) (exclusive jurisdiction); 7 U.S.C. §7a-2(c)(5)(C) (2022) (special rule for event contracts); 17 C.F.R. §40.11 (2025).

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

MAY 2026 | 39

THE OKLAHOMA BAR JOURNAL