Andrew Howlett discusses prediction markets, which have surged into high stakes financial arenas even as their growth has outpaced the U.S. tax code. He cautions that treating prediction market contracts like regulated futures under Section 1256 could force taxpayers to pay taxes on year end paper gains that never materialize. "I don't want to have to pay taxes on it if I haven't won anything yet," Howlett said, warning that the rule can in some circumstances produce "a harsher result than even just treating it as gambling income."