Nevada authorities say Kalshi's decision to pay a 6% revenue tax in North Carolina contradicts the company's position that states have no right to regulate prediction markets. Senior Deputy Attorney General Abigail Pace called it 'a stunning about-face' in a new filing to the Ninth Circuit Court of Appeals, where Kalshi is fighting state regulators.
North Carolina passed SB257 in July, imposing a 6% tax on prediction-market platform revenue. Kalshi supported the move, arguing the tax recognises the exclusive authority of federal regulator CFTC and imposes no licensing or other regulatory requirements. Nevada calls Kalshi's attempt to separate taxation from regulation 'pure formalism' — both are forms of state control. The state argues Kalshi has effectively admitted that states may regulate its operations, and therefore cannot avoid Nevada's tax rules.
The problem for Nevada is its online betting rate of 6.75%, one of the lowest in the country. Casino groups with influence in the state are unlikely to accept Kalshi operating at a similar rate. In North Carolina, sports betting carries a 23% tax while prediction markets face just 6%. Senator Julie Mayfield warned that betting revenue would 'collapse'. DraftKings and FanDuel, which account for around 70% of wagers in the state, are already entering prediction markets and have withdrawn Nevada licences to pursue the sector.
ParlayX founder Andrew Gonzalez explained the model difference: bookmakers hold an 8–12% margin, while exchanges like Kalshi charge a 1–2% commission per trade. A $40 billion handle generates less revenue for exchanges, and therefore less tax. How the court interprets Kalshi's position on the North Carolina tax may determine the industry's future.
