NC raises sportsbook tax as Kalshi World Cup trading surges

North Carolina’s legislature approved a bill that increases the tax on sportsbook revenue from 18% to 23% and requires operators to report customer wagering results to state authorities. The bill is pending Gov. Josh Stein’s signature. Under the reporting rule, a player who records $2,000 or more in winnings at a single operator during a tax year would be treated as owing state taxes on that amount even if the bettor has losses elsewhere.

North Carolina law does not allow gamblers to deduct losses against winnings for state tax purposes. A recent federal tax change limits the losses gamblers may claim to 90% of their winnings.

Legal and industry observers described the reporting requirement as unprecedented because it compels operators to provide granular customer betting records to the state. Advocates for bettors cautioned that the combined effect of a higher operator tax rate and mandatory customer reporting could prompt some players to use offshore books, informal local wagering lines, or prediction markets instead of regulated sportsbooks. Critics noted those shifts could reduce taxable activity on regulated platforms.

Kalshi, a prediction-market exchange, reported daily trading above $1 billion since June 12 and more than $17 billion in total World Cup volume since the tournament began. The company identified parlays, marketed on its platform as “combos,” as a major growth driver. Liquidity providers have observed that prediction markets are handling bets on many World Cup fixtures that take place in jurisdictions without legal sports betting.

Joe Stauff, an analyst at Susquehanna that supplies liquidity to exchanges, described prediction markets as “outsized beneficiaries” of the World Cup surge. Volume on a recent Wednesday reportedly was about double what Kalshi handled on Super Bowl Sunday.

People familiar with Kalshi’s funding talks said the company is pursuing new capital that could value the business as high as $40 billion, up from a $22 billion valuation in May. Early equity holders have seen large paper gains; one adviser who received stock when the firm’s valuation was below $2 billion now holds a substantially more valuable position.

Regulatory filings with the Commodity Futures Trading Commission show another prediction-market operator self-certified contracts tied to player movement that could include high school athletes committing to college programs. Last year, an exchange halted self-certified contracts related to college athlete transfers after objections from the collegiate sports sector.

Operators are also taking steps to police customer conduct. Fanatics Sportsbook launched a program to suspend or ban bettors who threaten or harass athletes on social media, using technology and third-party partners to identify abusive accounts. Several large sportsbooks already close accounts tied to abusive conduct and have policies to limit harassment.

Voters in the Lumbee Tribe rejected a state constitutional amendment that would have allowed a casino resort on tribal land. Sixty-two percent of participating tribe members voted against the amendment; opponents cited governance concerns and moral objections while supporters had argued the project would boost the local economy.

The bill increasing North Carolina’s sportsbook tax now awaits Gov. Josh Stein’s decision. Regulatory filings, operator programs and trading activity on alternative platforms are continuing to develop alongside the changes in state tax and reporting rules.