North Carolina breaks state deadlock on prediction markets

The legislation establishes a 6% tax on net trading fee revenue generated by these platforms from state residents. This move marks a sharp departure from the regulatory friction seen in states like Kentucky and Illinois, where officials have attempted to bundle prediction markets under local gambling statutes. By anchoring the industry to federal oversight via the Commodity Exchange Act, North Carolina creates a framework that contrasts with the 14.25% fee tax in Kentucky and the tiered levies imposed in Illinois.

This legislative shift arrives during a period of intense legal scrutiny for the sector. A federal judge in New York recently denied Kalshi’s request to block state-level gambling enforcement, a ruling that legal experts suggest may complicate ongoing challenges against state regulators. Attorney Daniel Wallach noted that the court’s skepticism regarding federal preemption underscores the traditional state-level control over gambling, leaving the industry to navigate a fractured legal landscape as Kalshi pursues an appeal in the Second Circuit.