North Carolina passes bill recognizing CFTC preemption over prediction markets
North Carolina has enacted legislation that explicitly recognizes federal authority over prediction markets while imposing a tax rate lower than that on sports betting platforms.
On July 7, Governor Josh Stein signed Senate Bill 257 as part of the state's 2026 budget bill.
The legislation states that registration with the Commodity Futures Trading Commission will allow prediction markets, such as Polymarket and Kalshi, to operate lawfully in North Carolina. It explicitly stipulates that the Commodity Exchange Act establishes "exclusive federal regulatory authority" of the CFTC over prediction markets.
This approach differs from several other states that are pushing to subject prediction markets to state gambling regulations and licensing, sparking legal challenges from the CFTC and the prediction market platforms. These states focus primarily on sports-related event contracts, which they allege violate state gaming regulations.
Earlier this week, a federal judge denied Kalshi's preliminary injunction to block New York regulators from enforcing its gambling laws against the prediction market platform. While Kalshi has since appealed the decision to the Second Circuit, sports law attorney Daniel Wallach said that the ruling will likely negatively affect Kalshi's ongoing legal battle with other states.
6% tax
On top of this, North Carolina's new law taxes prediction market platforms at 6% of their net trading fee revenue that is attributable to North Carolina residents, effective Jan. 1, 2027. In contrast, the state increased its tax on sports betting operators from 18% to 23% on gross wagering revenue.
The 6% tax on net fee revenue is softer than the tax approach that other states seek to impose on prediction markets. Kentucky's legislature passed a bill requiring platforms to pay 14.25% of transaction fees, prompting the CFTC to file a complaint against the state.
Illinois folded prediction markets into its sports wagering regulatory and tax framework, imposing a tiered transaction tax on exchange wagers — 1.75% on the first 5 million wagers in the fiscal year and 3.5% thereafter — and subjecting platforms to state licensing requirements, a move that Kalshi promptly challenged in court.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Wall Street giants collectively raise rate hike forecasts, US Treasury futures continue to fall, gold drops over 1% to break 4000
After the US October CPI exceeded expectations, Goldman Sachs and Nomura added a forecast for an interest rate hike in March next year, while Deutsche Bank included a forecast for a rate hike in January next year. Currently, the market has fully priced in a 25 basis point rate hike in December, with a 13% probability for a 50 basis point hike. On Wednesday, the US Treasury spot market was closed, but Treasury futures continued to fall, with corresponding yields rising by about 2 to 4 basis points, and spot gold came under pressure, dropping by 1.1%.
No Need to Worry About the Cooling Down of AI Data Center Construction? The US Import Boom Is Unlikely to Subside in the Short Term, Real Impact May Come in 2029
It takes an average of 4.8 years from finalizing investment to starting construction of a data center project, and an additional 2.6 years from construction start to becoming operational. Servers usually cannot be installed until after the building structure and racks are completed. For trade partners such as Taiwan (China), South Korea, and Mexico who rely on US data center supply chain demand, the inertia in construction timelines provides at least a one- to two-year buffer for future exports.
Federal Reserve Major Debate: When Should the Tenure of “Number Three” Williams End?
The main point of contention is whether Williams should step down in June 2028, upon completing a full 10-year term, or in June 2027, when he reaches the mandatory retirement age of 65. Analysts point out that the Federal Reserve Board holds ultimate discretion; if he leaves early, Fed Chair Waller would be able to assert greater control over the appointment to this critical position. However, forcing Williams to shorten his term could easily be interpreted as political manipulation. Williams himself is expected to serve until June 2028.
Sunshine Silver weighs doubling mill capacity
Crypto prices
More
