In the latest North Carolina budget proposal, lawmakers are looking to double the NC sports betting tax.
North Carolina Senate Republicans released their two-year budget on Monday night. It includes doubling the NC sports betting tax rate to 36% from 18%. The Senate has a large Republican majority, but it must also find an agreement with a yet-to-be-released House budget.
Online sportsbooks launched in the state in March 2024 and paid more than $135 million in their first year of operation.
NC sports betting revenue to colleges
The budget would alter the tax revenue distribution system. As part of the proposal, it would require the University of North Carolina and NC State University to play basketball games against other UNC System schools.
In the current system, 13 UNC System schools receive $300,000 from sports betting tax revenue and another 20% of the remaining amount following other required distributions. The new budget proposal would allocate between $500,000 and $1.5 million to the schools.
UNC and NC State are not included in the current distribution. Under the new proposal, the two schools would receive 10% of the funds after the required distributions are paid out.
Tar Heel State market
There are eight sportsbooks live in North Carolina:
- Bet365
- BetMGM
- Caesars
- DraftKings
- ESPN Bet
- Fanatics Sportsbook
- FanDuel
- Underdog Sports
North Carolinians have wagered more than $6.6 billion since the market launched.
Tax hikes in other states
Multiple lawmakers in other states looked at raising sports betting taxes this year. Legislators in Indiana and Massachusetts introduced tax hikes, with neither proposal going far.
Maryland Gov. Wes Moore proposed doubling the rate to 30% from 15%. A budget agreement between the legislature and Moore dropped it to a 5% hike, but it did not pass this session.
New Jersey Gov. Phil Murphy looked to increase both sports betting and online casino rates to 25%. A separate proposal was introduced in the NJ House to take it to 30%.
Last week, Ohio lawmakers denied Gov. Mike DeWine’s proposed doubling of the tax rate from 20% to 40%. DeWine previously doubled it from 10% to 20% in the 2023 budget.
