North Carolina’s bill recognizes the CFTC’s “federal regulatory authority” on prediction markets

North Carolina has become one of the few states to officially side with federal regulators in the escalating battle Prediction marketsenacted a law recognizing the authority of the Commodity Futures Trading Commission (CFTC) over platforms such as Kalshi and Polymarket.

Gov. Josh Stein signed the measure on July 7 as part of the state’s 2026 budget. Senate Bill 257. A prediction market registered and licensed by the Commodity Futures Trading Commission may operate legally in the state, the law says, because the Commodity Exchange Act creates the agency’s “exclusive federal regulatory authority” over such platforms.

Forecasting markets and government taxes

The law leaves oversight of prediction markets to Washington and simply takes a share. It imposes a 6% tax on operators’ net trading fee revenue attributable to North Carolina residents as of January 1, 2027, but the law is clear that the tax carries no licensing, registration, or other regulatory obligations of any kind.

That’s a much lighter touch than the state applies to bookmakers: North Carolina, at the same time, raised its taxes on sports betting operators from 18% to 23% of gross betting revenue. It is also gentler than what other countries seek. Kentucky has passed a bill that would tax platforms at 14.25% of transaction fees, prompting a tax on platforms. CFTC Complaintwhile Illinois incorporated prediction markets into its sports betting system through a tiered transaction tax and licensing rules, which Calci quickly moved to. Challenge in court.

Violating state repression

North Carolina’s position is a strange one. More than a dozen states have moved to treat prediction markets as unlicensed sports betting, prompting a wave of lawsuits. With the Commodity Futures Trading Commission (CFTC). File a lawsuit against At least nine countries defend what they call their exclusive jurisdiction, and Kentucky v. Calci and Polymarket It is only the last front. The courts have been badly divided, with the platforms winning injunctions in New Jersey and Tennessee but losing in Maryland, Nevada and Arizona.

The North Carolina law arrives days after Calci’s biggest setback yet, with a federal judge in New York This week Kalshi’s request is rejected To prevent state gambling regulators, the Commodity Exchange Act did not preempt New York’s gambling laws as applied to its sports contracts.

With rulings coming in opposite directions, the dispute increasingly appears headed to the US Supreme Court. CFTC separately Finalizing national rules For event contracts that could eventually be loosened on a state-by-state patchwork, with the public comment period closing on July 27.