North Carolina Enacts Law Recognizing CFTC Authority Over Prediction Markets

North Carolina Enacts Law Recognizing CFTC Authority Over Prediction Markets – North Carolina has passed legislation recognizing the Commodity Futures Trading Commission’s (CFTC) regulatory authority over prediction markets. The new law imposes a 6% tax rate on these markets while sports betting faces a 23% tax.

What Happened

North Carolina has enacted a law that officially recognizes the federal regulatory authority of the Commodity Futures Trading Commission (CFTC) over prediction markets, including platforms like Kalshi and Polymarket (Decrypt). This legislative action differentiates North Carolina’s approach from other jurisdictions that have sought to regulate prediction markets under gambling statutes. The new state budget, signed into law by the Governor, includes provisions that authorize prediction market betting and subject it to new state taxes (WRAL.com, iGaming Post).

Under the new North Carolina law, prediction markets will be taxed at a rate of 6% (Decrypt, North Carolina Sides With Federal Preemption). This tax rate is significantly lower than the 23% tax imposed on sports betting operations within the state (North Carolina Sides With Federal Preemption). The state’s budget law specifically leaves the oversight of platforms such as Kalshi and Polymarket to the CFTC (Decrypt).

Key Details

• North Carolina’s new law recognizes the CFTC’s federal regulatory authority over prediction markets like Kalshi and Polymarket (Decrypt).
• Prediction markets in North Carolina will be taxed at a rate of 6% (Decrypt, North Carolina Sides With Federal Preemption).
• Sports betting in North Carolina is subject to a higher 23% tax rate (North Carolina Sides With Federal Preemption).
• The Governor of North Carolina signed the new sports betting and prediction market taxes into law (iGaming Post).
• The authorization of prediction market betting is included in North Carolina’s new budget (WRAL.com).

Why It Matters

North Carolina’s legislative decision concerning prediction markets represents a notable development in the regulatory landscape for these financial instruments, particularly as other states have adopted different approaches, often treating them as gambling (Decrypt). By explicitly recognizing the CFTC’s jurisdiction, North Carolina has aligned with a federal preemption stance (North Carolina Sides With Federal Preemption, CFTC Regulation Prediction Markets). This action provides a clear regulatory framework for platforms operating within the state and establishes a specific tax regime for prediction markets distinctly separate from traditional sports betting.

The disparity in tax rates, with prediction markets taxed at 6% compared to sports betting at 23%, could influence the operational viability and competitive landscape for various market participants (North Carolina Sides With Federal Preemption). This framework provides a benchmark for how states may choose to differentiate between various forms of speculative markets and their respective regulatory bodies (Decrypt, CFTC Regulation Prediction Markets).

What’s Next

The implementation of these tax rates and regulatory recognitions is now in effect following the Governor’s signing of the new budget and associated legislation (iGaming Post, WRAL.com).

Originally reported by: Decrypt. Published: 7/10/2026, 10:01:08 AM.