North Carolina writes CFTC primacy into law, taxes prediction markets at 6% vs 23%
North Carolina's new budget law backs CFTC authority over prediction markets, taxing them at 6% versus 23% for sportsbooks, as state splits widen.
North Carolina has fixed the tax rate on prediction-market venues at 6% of net trading fees, versus 23% for licensed sports-betting operators in the state. The provision sits inside Senate Bill 257, signed into law by Governor Josh Stein on July 7. The 17-point spread is the number market participants should anchor on, not the surrounding political commentary.
A federal-primacy clause, not just a rate
The statutory text goes further than pricing. It states that any prediction market registered and licensed by the Commodity Futures Trading Commission may operate lawfully in North Carolina — a direct legislative endorsement of federal, rather than state, jurisdiction over platforms like Kalshi and Polymarket.
That places North Carolina among a small set of states opting to treat these contracts as CFTC-regulated instruments rather than classifying them under state gaming law as unlicensed wagering products. For operators building compliance maps, this is a rare instance of a state legislature codifying deference to Washington in the same bill that sets its own tax terms.
Reading the tax spread as policy signal
A 6% levy on North Carolina-attributable net trading fees, against a 23% sports-betting rate, is a structural discount of roughly 74%. That gap indicates a deliberate decision to categorize prediction markets separately from sports wagering rather than absorb them into existing gambling tax brackets.
For platforms and liquidity providers, tax differentials of this size can shape where compliance spend and order flow concentrate as more states finalize their own frameworks. Reporting on the bill has flagged North Carolina’s rate as sitting well below levels other states are currently pursuing, which widens the dispersion in an already fragmented state-by-state tax and regulatory map for these products.
Set against a courtroom loss for Kalshi
The North Carolina law landed within days of a New York judge issuing a significant adverse ruling against Kalshi, sharpening the divide between state-court skepticism and state-legislative deference to CFTC authority. One jurisdiction wrote federal primacy into its tax code the same week another state’s court pushed back against a prediction-market operator’s standing.
For desks running exposure through Kalshi or Polymarket, that divergence — not any single state’s headline tax rate — is the variable to track. The direction of travel on federal-versus-state jurisdiction will determine which states remain durable operating bases for volume and which turn into legal chokepoints, as further legislative action, follow-on court rulings, and any CFTC guidance accumulate over coming months.
Read more: CFTC Clears DRW-Linked Optex as a Crypto Derivatives DCM, Not Yet Tradable