North Carolina lawmakers are reportedly discussing raising sports betting taxes to as much as 30%.
WRAL-TV reported last week that North Carolina budget negotiations have included legislators recommending increasing taxes on NC sports betting, as well as additional lottery sales tax. The recommendations could also include an additional fee for each bet, similar to what Illinois implemented last year.
North Carolina sportsbooks currently pay 18% on sports betting revenue. Since launching in 2024, the operators have paid more than $287 million.
Last year, the Senate approved a budget with an increase to 36%. The House and Senate did not compromise on a budget in 2025.
North Carolina sports betting potential
The report notes the recommended tax rate will likely fall between 20% and 30%.
Sports betting makes up 1% of the state budget, but the additional dollars could help fund key state projects. If the tax rate was 30% since launch, sports betting would have generated nearly $200 million in additional tax revenue.
Half of the tax revenue goes to the general fund with the rest split between gambling addiction treatment and education, youth sports and the athletic departments for the 13 UNC system schools.
Industry pushback
The Sports Betting Alliance, which represents bet365, BetMGM, DraftKings, Fanatics and FanDuel, pushed back against North Carolina’s first attempt to raise taxes.
“When states raise taxes, the costs get passed down to customers — directly hitting your wallet,” an SBA webpage on opposing the NC sports betting tax hike reads. “It punishes NC sports fans who play by the rules and pushes more people toward illegal offshore sites with no consumer protections.”
Opponents suggest raising taxes could push bettors back offshore as regulated operators could lead to worse odds and fewer promotions.
Lawmakers, regulators caution tax increases
At December’s National Council of Legislators from Gaming States meeting in Puerto Rico, multiple state lawmakers and regulators warned audiences of potential negative effects of tax increases on the industry.
“We really have to be careful,” Louisiana Gaming Control Board Chairman Christopher Hebert said. Louisiana was one of several states to raise its taxes on sports betting in 2025, with operators now paying 21.5% from 15% previously.
“The original proposal was a tax increase to 50%,” Hebert added. “We knew that was never going to happen. You would lose operators because the cost of doing business just isn’t worth it.”
North Carolina sports betting mimicking IL?
In Illinois, lawmakers first increased taxes from a flat 15% to a tiered system ranging from 20% to 40% in 2024. Then last year, they introduced per-bet fees.
Illinois Rep. Jehan Gordon-Booth said at NCLGS that states are looking for new revenues as federal dollars dry up. But going back to sports betting operators already paying into the tax coffers could have negative effects.
“Lawmakers need to understand, what you think you’re going to get from raising taxes, you’re not going to get,” Gordon-Booth said. “We want this industry to continue to strike the right balance. This will be a problem in budgets for the foreseeable few years in budgets. I don’t want to see us continue to deteriorate the industry.”
