North Carolina lawmakers have agreed to raise the sports betting tax rate, confirming that the Tar Heel State will be the latest to ask sportsbooks for a bigger piece of the pie.
WRAL-TV‘s Brian Murphy confirmed last week that the deal would raise the tax rate to 23% from 18%. The confirmation came from Sen. Jim Burgin, who said he personally wanted a 50% tax rate.
Burgin did not respond to requests for comment before publication.
It is the second straight year NC’s lawmakers considered a sports betting tax increase. An attempt to double the North Carolina sports betting tax rate to 36% failed last year.
The move lands as the market continues to grow, with bettors wagering more than $561 million in May and total 2026 handle running more than 6% ahead of the prior year.
North Carolina sports betting tax path
North Carolina’s current increase follows a fast-moving legislative history. The state launched legal online sports betting in 2024 and quickly became a strong revenue producer.
Last year, lawmakers floated a much steeper hike, with the Senate passing a tax increase to 36%. That proposal never made it into the final budget after the House and Senate split.
This year’s agreed-upon 23% rate suggests a compromise, not a retreat from the broader idea that sportsbooks are a dependable source of state revenue.
Why this matters
For sportsbooks, each new tax hike changes the economics of the business. Operators can absorb some of the cost, but the industry argues higher taxes cause lower promos, tighter pricing or added fees for customers. They suggest that could push consumers to unlicensed and untaxed operators.
“When states raise taxes, the costs get passed down to customers — directly hitting your wallet,” a Sports Betting Alliance 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.”
The remaining question is whether North Carolina’s 23% rate is the end of the conversation or just the latest stop on a longer tax escalator. Given last year’s failed 36% push, operators will likely treat this as proof that a bigger hike could come back again if revenue needs change.
For now, the state has joined the growing list of jurisdictions using sportsbook revenue to plug budget holes.
Another state raises sports betting tax
North Carolina is not alone in look toward sports betting for additional tax revenue. A growing number of states have moved to raise gambling taxes or trim deductions as they look for new revenue without creating entirely new taxes over the past few years.
Last year, Maryland lawmakers raised the mobile sportsbook tax to 20% from 15%. Similarly, Louisiana increased its online sports betting tax to 21.5% from 15%. New Jersey raised the rate on both online casino and sports betting to 19.25% jumped their tax to 19.25% from 15% and 13%, respectively.
Just a year after increasing its taxes from 15% to a tiered system of 20% to 40% based on revenue, Illinois added a per-wager fee of 25 cents on the first 20 million online bets and 50 cents after that in 2025.
Colorado passed a bill in 2025 that sunsets promo-bet deductions, reducing a common operator tax break.
While lawmakers might see the industry as an easy way to generate additionally taxes, industry sources suggest legislators should be wary on overburdening the industry with outside threats like prediction markets.
