North Carolina‘s legislators have tentatively agreed to a new tax rate for the NC sports betting market, according to reports.
The new tax rate is at the lower end of the 20% to 30% range previously reported by WRAL-TV. That could still change depending on the overall spending plan as well as pushback from the industry.
Right now, North Carolina sportsbooks are taxed at 18% on gross sports betting revenue.
NC sports betting tax hike
House budget writer Donny Lambeth confirmed to WRAL-TV the House and Senate agreed to alter the tax rate, though he did not expand on the specifics.
Last year, the Senate proposed an increase to 36% and passed its budget version. The House, however, kept their tax rate at 18% and neither ultimately was adopted.
Operators are opposed to the increase, suggesting higher taxes could lead to worse odds and less promo spending. That could cause customers to shift to unlicensed, and untaxed, alternatives.
“When states raise taxes, the costs get passed down to customers — directly hitting your wallet,” a Sports Betting Alliance webpage 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.”
Successful NC sports betting
Since their launch in 2024, the state’s eight sportsbooks have sent more than $287 million in taxes to the state.
The state sends half of the revenue to the general fund, while the rest is split between gambling addiction treatment and education, youth sports and the athletic departments of 13 UNC system schools.
“It’s been a tremendously successful policy in this state,” House Speaker Destin Hall, R-Caldwell, said. “A lot of people apparently like to do that sort of thing for one reason or another. Got a lot of revenue to the state. I think, on our side of the building, it’s more so looking at, ‘How do we line up with other states?’
“We want to be on the average of what other states are doing on a lot of these rates. A lot of the ideas are out there. I think we’re somewhat hesitant to tweak too much a program that’s worked pretty well for the state all things considered.”
Quiet year for tax hikes
Heading into the legislative session, multiple industry sources suggested states would start to look back at sports betting tax rates as a way to raise additional, much-needed funds as federal dollars begin to dry up.
While expected, the industry sources, as well as state lawmakers and regulators, warned at the National Council of Legislators from Gaming States winter meeting, that raising taxes could harm the industry.
There has been some discussion this year on raising taxes, like in Michigan, but few have progressed like in North Carolina.
