North Carolina budget would authorize prediction markets and tax CFTC platforms at 6%
North Carolina's pending state budget would create a regulatory framework authorizing prediction markets to operate in the state and exempt promotional dollars from federally regulated platforms from state taxation. A provision in the 2026 budget marks the first explicit state-level acknowledgment of CFTC prediction market oversight. Some critics have called the measure a 'sweetheart deal.' The language would let event-contract trading platforms offer markets to residents under state rules.
The explicit acknowledgment of CFTC oversight gives Kalshi and Polymarket a rare state welcome, but the 6% operator tax joins Illinois's 15% levy as a second state revenue grab that erodes their margin against untaxed offshore rivals. Every new state that layers its own tax or licensing regime on top of federal registration forces both platforms toward a fractured U.S. map: geofenced in hostile states, taxed in friendly ones, and fighting preemption battles everywhere else.
North Carolina's framework becomes a template legislatures in other states can copy and modify. The first federal appellate ruling on whether CFTC registration preempts state tax regimes will settle whether platforms face one federal regulator or fifty.
The tax layer sits atop a broader pattern: North Carolina is now the third state to build its own prediction-market regime alongside federal CFTC registration, after Illinois and Kentucky.