North Carolina Governor Josh Stein has officially signed into law a bill recognizing the exclusive jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC) over prediction markets. This decision directly impacts platforms like Kalshi and Polymarket, which can now operate in the state without needing an additional local license.
A key element of the new regulation is the introduction of a 6% tax on net trading commissions earned from transactions by North Carolina residents. However, it is important to emphasize: this tax is levied exclusively on platform operators, not on traders. Thus, the state sets a precedent where federal oversight is deemed sufficient, and local bureaucratic barriers are eliminated.
What does this mean for the industry?
This move is a significant signal for the entire crypto ecosystem. Prediction markets have long existed in a regulatory gray zone, balancing between gambling and financial derivatives. Recognizing the CFTC as the primary regulator in this segment not only simplifies life for operators like Polymarket but also creates a legal framework for their lawful operation in one of the major U.S. states.
From my perspective, this decision is much more than just a local regulation. It is effectively a test drive of a model where states delegate authority to federal agencies, receiving a stable tax stream in return. If the model proves successful, we can expect a wave of similar laws in other jurisdictions, ultimately legitimizing prediction markets as a full-fledged class of financial assets.
Expert opinion: North Carolina has demonstrated a pragmatic approach that benefits all parties. Platforms gain clarity and reduced regulatory burden, the state gains tax revenue, and users gain protection at the federal level. This could be the catalyst that pushes other states toward similar decisions, finally bringing prediction markets out of the shadows.