North Carolina sets 6% tax, recognizes CFTC authority

North Carolina will allow CFTC-registered prediction markets to operate without a state license and tax their net trading fee revenue at 6% from 2027, while raising the sports betting tax to 23%.

North Carolina has passed a law explicitly recognizing the Commodity Futures Trading Commission’s (CFTC) federal authority over prediction markets, including platforms like Kalshi and Polymarket. Starting January 1, 2027, these platforms can legally operate in the state without a state license, provided they are registered with the CFTC. The new law imposes a 6% tax on net trading fee revenue generated from North Carolina residents using these prediction markets. In contrast, the tax rate for sports betting operators will increase from 18% to 23%. This legislative move sets North Carolina apart from other states, which often classify prediction markets as gambling and require state licensing, leading to legal disputes. North Carolina’s approach establishes a two-tier tax system and signals support for prediction markets over traditional sports betting, as debates over federal and state regulatory authority continue elsewhere.