Nevada cites North Carolina tax law to undercut Kalshi preemption claim
Nevada gaming regulators are citing North Carolina's S.B. 257 tax law in their ongoing litigation against Kalshi. The state argues the statute acts directly in the field Kalshi claims is federally preempted regarding Designated Contract Market transactions. Nevada contends Kalshi cannot support North Carolina taxing its operations while maintaining federal law preempts all state regulation of its activities. The reference surfaced in briefing where states are contesting the scope of federal preemption over event-contract trading.
Nevada's gambit turns Kalshi's North Carolina tax compliance into a weapon against its broader preemption theory. If courts accept that Kalshi invited one state's tax jurisdiction, Kalshi weakens its claim that federal law bars every other state's regulatory reach. That hurts Polymarket and Novig too; all three platforms built national scale on preemption, and each state win against Kalshi erodes the shield they share.
Legal teams now must audit every state filing and tax posture for contradictions that rivals or regulators can exploit. The Illinois tax suit, filed the same day, shows the squeeze: Kalshi fights state revenue grabs on one coast while Nevada uses a prior revenue agreement on the other to pry open preemption's cracks. Compliance costs multiply as platforms lose the luxury of a single federal standard.
Today's filing adds North Carolina's tax code to the ammunition stack Kalshi is already handling in Illinois, making it the second state tax-and-license fight Kalshi faces in under a day.