North Carolina backs federally regulated prediction markets

• North Carolina has approved a law recognising federal oversight of prediction markets.
• The law allows CFTC-regulated platforms to operate legally from January 2027.
• Prediction markets will face a 6% tax on trading fee revenue earned from state residents.

North Carolina has passed a law recognising the Commodity Futures Trading Commission's authority over prediction markets and allowing federally regulated platforms to operate from Jan. 1, 2027.

The new law applies to CFTC-registered platforms such as Polymarket and Kalshi and introduces a 6% tax on their net trading fee revenue from North Carolina users.

The legislation also states that the Commodity Exchange Act gives the CFTC exclusive authority to regulate prediction markets.

North Carolina's approach differs from states including Kentucky and Illinois, which have applied gambling laws or higher taxes to prediction market platforms.

Kalshi is still fighting legal challenges in several states over whether its sports event contracts should be regulated under state gambling laws.

A federal judge recently refused to block New York from enforcing its gambling laws against Kalshi while the case continues.

Kalshi has appealed that decision, and the legal dispute over federal and state control of prediction markets remains unresolved.