North Carolina Law Recognizes CFTC Authority Over Kalshi, Polymarket
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- North Carolina enacted a law (Senate Bill 257, signed by Gov. Josh Stein on July 7) recognizing the CFTC's "exclusive federal regulatory authority" over prediction markets, allowing CFTC-licensed platforms like Kalshi and Polymarket to operate lawfully in the state.
- The statute taxes prediction-market operators at 6% of net trading-fee revenue attributable to North Carolina residents starting January 1, 2027, with no licensing or registration obligations attached.
- North Carolina simultaneously raised its sports-betting tax from 18% to 23% of gross wagering revenue, creating a deliberate rate gap between federally regulated platforms and state-licensed bookmakers.
- A New York federal judge this week denied Kalshi's bid to block state gambling regulators, ruling the Commodity Exchange Act does not preempt New York's gambling laws as applied to Kalshi's sports contracts.
- Courts have split sharply on the preemption question: Kalshi secured injunctions in New Jersey and Tennessee but lost in Maryland, Nevada, and Arizona, with the CFTC suing at least nine states and Kentucky filing its own suit.
- Kentucky taxes platforms 14.25% of transaction fees and Illinois folded prediction markets into its sports-wagering regime—both moves Kalshi is challenging—while the CFTC separately finalizes national event-contract rules with a public-comment deadline of July 27.
Why it matters: North Carolina becomes one of the only states to formally accept federal primacy over prediction markets, carving out a 6% revenue stream without imposing gambling-style regulation. With courts splitting in five states and Kalshi just losing in New York, the patchwork is almost certain to reach the Supreme Court, and the CFTC's own national rulemaking (comments close July 27) could settle the fight before then.
