Prediction Market Accounting for Trading Firms, Market Makers & Professional Traders

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Reconciling transaction records, position changes, settlement activity, and cash movements across Kalshi, Polymarket, and other prediction market platforms, accounting for differences in their reporting formats and transaction mechanics.

As Seen In:

Camuso CPA

2026 Report

Prediction Market Research

State of U.S. Prediction-Market Tax and Accounting 2026

Camuso CPA’s 2026 report examines the separate accounting, federal tax, information-reporting, and substantiation issues arising as prediction markets expand into professional trading and market-making activity. The report addresses transaction-level records, reconciliation, position and settlement data, book-to-tax reporting, and the federal tax questions that depend on those underlying records.

Read the Report →

Why Prediction Market Trading Firms Work With Camuso CPA

High-volume trading firms need records that reconcile executions, open and resolved positions, venue and cash balances, maker rebates, liquidity incentives, and other material activity to the company’s books.

Camuso CPA combines experience in complex transaction reconstruction with the design and maintenance of specialized trading subledgers, general-ledger integration, period-end close, and financial reporting. Our work establishes a consistent accounting foundation for firms operating automated strategies and trading across multiple prediction market venues.

Because Camuso CPA also provides technical prediction market tax services, the underlying accounting records can support book-to-tax reconciliations, written tax positions, and applicable entity and owner reporting.

Engagements can be structured around historical accounting cleanup, a defined reconstruction or subledger project, recurring accounting and financial reporting, or a combination of those services based on the firm’s existing systems and needs.

Our Prediction Market Accounting Process

Step 1: Trading Activity, Entity & Records Review

We review the firm’s prediction-market activity, venues, trading strategies, transaction volume, entity structure, ownership, available source data, existing books, and current reporting process. This allows us to determine the accounting scope and identify gaps in the records before work begins.

Step 2: Accounting Methodology & Reporting Structure

We establish the accounting treatment and reporting structure appropriate for the firm’s activity, including the level of transaction detail required, subledger and general-ledger requirements, account mapping, reconciliation procedures, and period-end reporting needs.

Step 3: Reconstruction, Reconciliation & Subledger Accounting

Where required, we reconstruct and reconcile prediction-market activity from available source records and incorporate that activity into the firm’s accounting records. For high-volume trading firms and market makers, this may include maintaining transaction-level subledger records that support the general ledger and period-end close.

Step 4: Ongoing Close & Financial Reporting

For recurring engagements, we maintain the accounting on the agreed reporting cadence, including reconciliations, period-end close, financial reporting, year-end workpapers, and coordination with the firm’s tax reporting and other professional advisers where applicable.

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Prefer to reach us directly? Email info@camusocpa.com or call (704) 249-3179.

Who We Help: Prediction-Market Trading Firms, Market Makers & Professional Traders

Camuso CPA works with professional prediction-market participants whose transaction volume, trading strategies, entity structure, or reporting requirements extend beyond ordinary bookkeeping.

Our clients include founder-led trading firms, market makers, funds, and high-volume professional traders that need reliable accounting records, recurring reconciliation, period-end close, and financial reporting for prediction-market activity.

Common Prediction Market Accounting Challenges We Solve

Reconciling venue, cash, wallet, and internal trading data into supportable accounting records.
Accounting for large fill volumes, open positions, fees, maker rebates, and liquidity incentives.
Maintaining consistent accounting across Kalshi, Polymarket, and other prediction-market venues.
Maintaining transaction-level records that support the general ledger, period-end close, and year-end workpapers.
Reconciling open and resolved positions, realized and unrealized activity, and period-end balances.
Maintaining accounting records and workpapers that support the firm’s federal and state tax reporting.

Ready to Get Your Prediction Market Accounting in Order?

Prediction Market Accounting Services

Accounting services for professional prediction-market trading firms, market makers, funds, and high-volume traders.

Prediction Market Accounting & Reconciliation

Transaction reconstruction, venue and cash reconciliation, open-position rollforwards, fee and rebate accounting, and other work required to produce supportable prediction-market accounting records.

Subledger & General-Ledger Accounting

Transaction-level subledger accounting and general-ledger integration for prediction-market activity, including account mapping, venue-level reporting, and records that support period-end close and financial reporting.

Ongoing Accounting & Period-End Close

Recurring monthly or quarterly accounting, reconciliation, open-position reporting, general-ledger close, financial reporting, and year-end workpaper support for trading firms and market makers.

Book-to-Tax & Year-End Support

Accounting workpapers and reconciliations that connect the prediction-market books to tax reporting, including support for entity and owner reporting and coordination with the firm’s federal and state tax compliance.

Why Prediction Market Trading Firms Work With Camuso CPA

Professional prediction market firms may need accounting that can support high transaction volume, automated trading, multiple venues, open positions, maker rebates, liquidity incentives, and recurring financial reporting.

Camuso CPA works from the underlying trading records through reconciliation, subledger and general-ledger accounting, period-end close, financial reporting, and year-end workpapers. Because our practice also handles the related federal tax work, the accounting records can be maintained in a manner that supports the firm’s book-to-tax reporting and adopted tax positions.

Prediction Market Accounting

Case Study

Institutional Prediction-Market Market Maker — Millions of Fills and Ongoing Accounting

Client Type Quantitative Market-Making Firm

Activity Automated Market Making

Scale Millions of Fills

Scope Historical & Ongoing Accounting

The Problem

The firm had scaled its prediction-market trading activity before a corresponding accounting process had been established. Nearly two years of high-volume market-making activity had not been incorporated into the books, and no commercial accounting system was designed to process the firm's prediction-market transaction data at the required level of detail.

What We Did

Camuso CPA developed a transaction-level prediction-market subledger for the firm's market-making activity, reconstructed the historical trading records, and established the accounting needed to reconcile the trading activity into the general ledger. The resulting records also support the firm's year-end workpapers and related tax reporting.

The Outcome

The historical prediction-market activity was incorporated into the firm's books, the accounting methodology was implemented for continuing use, and Camuso CPA now manages the firm's ongoing accounting together with quarterly tax projections and provisions.

Prediction Market Accounting Guides & Technical Analysis

Camuso CPA publishes technical analysis on the accounting, reconciliation, financial reporting, and related tax issues affecting professional prediction-market activity. These resources address transaction-level records, subledger and general-ledger accounting, period-end close, multi-venue activity, year-end workpapers, and the federal tax questions that depend on the underlying accounting records.

Prediction Market Accounting: A Technical Guide for Traders, Funds, and Institutions

State of U.S. Prediction-Market Tax and Accounting 2026

Section 1256 and Prediction Markets: Do Kalshi and Event Contracts Qualify?

Get Your Prediction Market Accounting Right

We help professional prediction-market trading firms and traders establish and maintain accounting records that support reconciliation, period-end close, financial reporting, and year-end tax workpapers.

Prediction Market Accounting FAQ

What is prediction market accounting?

Prediction market accounting involves recording, reconciling, and reporting prediction-market trading activity for individual traders, trading firms, investment funds, and market makers.

Professional operations may need transaction-level records covering executions, open and settled positions, trading venue and cash balances, fees, maker rebates, liquidity incentives, and transfers.

These records support subledger and general-ledger accounting, period-end close, and financial reporting.

Why are prediction-market platform reports not always sufficient for accounting?

Platform reports provide important source information, but they do not necessarily constitute a complete accounting system.

Professional trading firms may need to reconcile executions, positions, settlements, cash movements, trading fees, rebates, incentives, and venue balances to the company's accounting records.

This becomes particularly important for high-volume or multi-venue operations where summary reports may not preserve the detail required for accounting, reconciliation, and financial reporting.

What does a prediction market accounting engagement include?

The engagement scope depends on the firm's trading activity, current accounting systems, and availability of records.

Services may include historical transaction reconstruction, trading reconciliation, prediction-market subledger accounting, general-ledger integration, account mapping, open-position rollforwards, period-end close, financial reporting, and year-end workpapers.

Camuso CPA can also coordinate accounting records with the firm's federal and state tax reporting requirements. Recurring engagements may include monthly or quarterly close support.

Does Camuso CPA provide ongoing prediction-market accounting?

Yes. Camuso CPA offers recurring accounting services for professional prediction-market traders and trading businesses.

Depending on the engagement, services may include transaction reconciliation, subledger maintenance, general-ledger accounting, monthly or quarterly close, financial reporting, book-to-tax workpapers, and year-end accounting support.

For professional trading firms and market makers, the accounting relationship can continue throughout the year rather than ending after a historical cleanup or year-end project.

How do market makers and high-volume trading firms account for prediction-market activity?

Market makers and high-volume trading firms may require transaction-level accounting capable of processing substantial execution volume, frequent position changes, open positions, fees, maker rebates, liquidity incentives, and activity across multiple venues.

The accounting methodology should reflect the firm's actual trading mechanics, entity structure, and financial reporting needs.

For some firms, this requires a dedicated prediction-market subledger supporting the general ledger, rather than relying solely on platform profit-and-loss summaries or aggregate bookkeeping.

How is multi-venue prediction-market activity accounted for?

Trading across multiple venues requires reconciling records that may differ in data formats, settlement mechanics, currencies, cash movements, wallet activity, and reporting conventions.

Accounting records should preserve sufficient venue-level detail to reconcile source transactions and balances while producing consistent reporting in the firm's general ledger and financial statements.

What is a prediction-market subledger?

A prediction-market subledger is a transaction-level accounting record that supports the company's general ledger. It preserves the detailed trading activity needed to reconcile balances and prepare period-end reports.

Depending on the trading operation, the subledger may track executions, positions, resolutions, settlements, fees, rebates, incentives, cash movements, and other relevant transactions.

Its purpose is to connect the underlying trading records with supportable general-ledger entries and financial reporting.

Can Camuso CPA clean up historical prediction-market accounting?

Yes. Camuso CPA works with trading firms whose historical prediction-market activity has not been incorporated into their books or whose existing records do not reconcile accurately.

We assess the available trading venue, cash, wallet, and internal records to determine the appropriate reconstruction and reconciliation scope.

Depending on the engagement, we can reconstruct historical activity, identify discrepancies, establish supporting accounting records, and integrate the resulting activity into the firm's general ledger.

How does prediction-market accounting connect to tax reporting?

Accounting records establish many of the underlying facts needed for federal tax analysis and reporting.

Those facts may include the contracts traded, position changes, transaction endpoints, amounts paid or received, fees, rebates, incentives, and how the activity was reflected in the books.

Camuso CPA provides specialized prediction-market accounting and tax services, allowing book-to-tax workpapers and applicable returns to be based on consistent underlying records.

When should a trading firm address its prediction-market accounting?

Ideally, before transaction volume, additional venues, market-making strategies, or year-end reporting make historical records increasingly difficult to reconcile.

Common triggers include rapid growth in trading volume, automated or systematic trading, expansion across venues, additional owners or entities, outside investment capital, investor diligence, audit preparation, and recurring financial reporting requirements.

Addressing accounting procedures early can help establish consistent records before historical cleanup becomes a larger project.