North Carolina's 2026 state budget explicitly authorizes CFTC-regulated prediction market platforms — making NC the first state to affirmatively bless the category while others are fighting it in court.
North Carolina SB 257 (2025-2026 legislative session) includes a provision creating Article 2F "Tax on Prediction Markets" that explicitly authorizes CFTC-approved prediction market platforms to operate in the state — no state license, permit, or registration required.
The budget has passed both chambers and is awaiting the governor's action. It may be signed, vetoed, or allowed to become law without signature.
| Platform | Available |
|---|---|
| Kalshi | Yes |
| Polymarket US | Yes |
| Robinhood Predictions | Yes |
| PredictIt | Yes |
| FanDuel Predicts | Confirm at fanduel.com |
Platform availability is subject to change. Confirm current access at each platform before trading.
Tucked into the revenue section of North Carolina's 2026-2027 state budget is a provision creating a new "Tax on Prediction Markets" — and, crucially, explicitly authorizing CFTC-regulated prediction market platforms to operate in the state. The provision expressly states that platforms approved by the CFTC may operate in North Carolina and that no state license, registration, permit, or other authorization is required. This makes NC's approach notably different from Illinois, which required platforms to obtain a state sports wagering license.
The operator tax applies to net trading fee revenue tied to North Carolina customers — specifically, traders who are both domiciled in NC and physically present in the state at the time of the trade. The budget defines "net trading fee revenue" as trading fees collected by the operator minus exclusions for broker/market-maker compensation, promotional credits or rebates, clearing fees paid to a derivatives clearing organization, and withdrawal fees.
North Carolina joins a small group of states actively taxing prediction markets (Kentucky was the first, followed by Illinois), but NC is the first to frame its law as an authorization rather than just a revenue measure. House Speaker Destin Hall described the rationale plainly: North Carolinians are already trading on platforms like Polymarket and Kalshi, so the state might as well collect tax revenue from it. The budget has passed both chambers and is awaiting Governor Josh Stein's action.
The tax is on operators, not traders. Prediction market platforms pay a percentage of their net trading fee revenue derived from NC customers. Individual traders do not pay the tax directly — it does not come out of your winnings or your account balance.
Could it affect platform pricing? Potentially, over time. If operators find NC customers more expensive to serve, they could adjust their fee structures. But platforms cannot directly pass the operator tax to users as a line-item deduction — how (or whether) they adjust pricing is a business decision.
How does it compare to sports betting? North Carolina sports betting operators pay a tax rate of 18% (being raised to 23% under the same budget), plus a $1 million licensing fee. The prediction market operator tax is significantly lower, which critics argue gives prediction market platforms a competitive advantage — particularly if sports betting operators rebranded as prediction markets to pay the lower rate.
While North Carolina is the first state to explicitly authorize prediction markets, other states have taken the opposite approach. The contrast is stark:
2026 budget explicitly authorizes CFTC-regulated platforms; 6% operator tax; no state license required.
SB 3019 mandates state wagering license for sports markets; Kalshi sued; PI pending while IL agreed not to enforce.
Full detailsKalshi TRO issued June 29, 2026 by AG Dana Nessel; expires July 13, 2026 pending PI hearing.
Full detailsFelony classification for unlicensed prediction markets takes effect August 1, 2026.
Full detailsThe NC budget provision was made public in late June 2026 and passed both chambers within days — with limited floor debate or public input. The fast timeline drew criticism from some lawmakers and advocacy groups who argued the provision gave prediction market platforms a regulatory sweet deal without the scrutiny applied to sports betting (which took years of public debate to legalize in NC).
Supporters argue: CFTC-regulated platforms already operate legally under federal law; NC residents are already trading; the state should collect revenue rather than cede it to other jurisdictions. The 6% operator tax creates a new revenue stream without requiring the complex licensing infrastructure applied to sports betting.
Critics argue: Prediction markets are functionally equivalent to sports betting and deserve the same regulatory scrutiny. The lower tax rate could incentivize sports betting operators to rebrand as prediction market platforms, eroding NC's existing $287M+ in annual sports betting tax revenue. Consumer protection guardrails are absent.
Track legal status across all 50 states — authorizations, TROs, and pending action.
Why prediction markets are legal under federal law while states fight to restrict them.
Illinois took the opposite approach: licensing requirements and active litigation.
Michigan's AG obtained a TRO against Kalshi — the most aggressive state enforcement action to date.
