North Carolina Becomes First U.S. State to Tax Prediction Markets and Recognize Federal Oversight

The rise of prediction-market platforms such as Kalshi and Polymarket has intensified a long-running dispute over whether they fall under U.S. federal or state oversight. States have generally treated such platforms as illegal gambling operations. But as prediction markets gain influence in events including elections, defining the respective jurisdiction of the Commodity Futures Trading Commission (CFTC) and state authorities has become a critical milestone in developing a sound market framework.

North Carolina's newly signed budget imposes a 6% tax on prediction-market platforms' net trading fees from 2027 while exempting them from state licensing requirements. The move makes North Carolina the first U.S. state to effectively recognize CFTC jurisdiction through a light-touch tax regime. It eliminates a cumbersome state application process and establishes a new regulatory model for other states.