NC bill would require sportsbooks to report bettors over $2,000

The North Carolina General Assembly approved the conference report for Senate Bill 595 this week. The provision would require sportsbooks to report registered accounts that recorded at least $2,000 in winnings during the prior calendar year to the state Department of Revenue. The conference report must be formally enrolled before the bill goes to Gov. Josh Stein.

Under the proposal, the Department of Revenue could request a qualifying bettor’s name, tax identification number, address, wagers placed, wager outcomes, winnings and other information deemed necessary to determine compliance with state tax law.

Opponents pointed to current state tax rules that do not allow gamblers to deduct losses against winnings on North Carolina returns. Under those rules, a recreational player who wins $2,000 and loses $2,000 in the same year could still face state income tax on the full $2,000 in gross winnings.

Critics also cited a recent federal change that limits the deduction of gambling losses to 90% for federal returns. Some bettors said they fear the state would gain access to detailed wagering records after a player crosses the $2,000 threshold and that data-sharing arrangements between the Department of Revenue and the Internal Revenue Service could allow the state to match wagering reports with federal W-2G forms and 1040 filings.

Sen. Tom McInnis acknowledged the final bill contained ‘a couple of late provisions that some of you didn’t see’ while defending the broader legislation. Senate leader Phil Berger expressed support for allowing deductions for gambling losses and indicated he believed SB 595 already included language to address that issue.

Separately, negotiators are discussing a budget proposal to raise the state’s sports betting tax from 18% of gross wagering revenue to 23%. That change has not been enacted; any increase would be finalized in the state budget, which lawmakers must pass by June 30. A prior effort to raise the rate to 36% failed when the two chambers could not reach agreement.

SB 595 now moves to formal enrollment. If enrolled, the bill will be sent to Gov. Stein for signature or veto. Lawmakers continue to negotiate the budget and whether to allow deductions for gambling losses on state tax returns.