North Carolina Governor Josh Stein has signed into law a bill that officially recognizes the federal oversight of the U.S. Commodity Futures Trading Commission (CFTC) over prediction markets, including platforms such as Kalshi and Polymarket. This move marks a significant precedent in the regulation of the rapidly growing event-based derivatives sector.
A key element of the new legislation is the introduction of a 6% tax on net trading commissions generated from transactions conducted by state residents. However, crucially for platform operators, the law does not require obtaining a separate local license—compliance with federal CFTC regulations is sufficient.
This decision demonstrates a pragmatic approach by North Carolina authorities. Instead of creating a duplicative bureaucratic barrier, the state chooses to integrate into the existing federal system while simultaneously collecting tax revenue from this new form of economic activity.
For the prediction market industry, which has long operated in a regulatory gray zone, this signals gradual legitimization. State-level recognition of CFTC jurisdiction reduces legal risks for operators such as Kalshi and Polymarket and may encourage other states to follow suit.
Analytical Commentary: While the 6% tax burden is moderate and unlikely to deter major players, the primary value of this law for the market is legal certainty. However, it is worth noting that in the long term, disparate tax requirements across different states could create operational complexity for platforms operating at the national level. I expect this to spur discussion on the need for a unified federal taxation standard for prediction markets.