North Carolina Lawmakers Consider Raising Sports Betting Tax

Lawmakers in North Carolina are considering raising the state’s 18% tax on online sports betting revenue to a rate between 20% and 30% as part of current budget negotiations. The talks include planned pay increases for state employees and teachers and scheduled income tax reductions. No formal bill has been filed.

The debate picked up after a divided outcome in 2023, when the state Senate backed doubling the tax to 36% and the House opposed an increase. Online sports betting launched in March 2024 with an 18% tax; operators have paid more than $287 million in taxes since launch. Officials estimate a 30% rate applied from launch would have generated nearly $200 million in additional revenue.

Lawmakers have also discussed higher taxes on lottery sales and a per-bet fee similar to the model adopted in Illinois. Legislative staff and some lawmakers described a per-bet fee as complex to administer and likely to face resistance from bettors.

A coalition representing major operators including DraftKings, FanDuel, BetMGM, bet365 and Fanatics ran a customer outreach campaign urging people to contact lawmakers and oppose tax increases. The group warned higher levies could be shifted to customers through reduced promotions, worse odds or other pricing changes, and said heavier taxation could make regulated sportsbooks less competitive with offshore markets.

Other states have recently changed gambling taxes. New Jersey raised online sports wagering and iGaming taxes to 19.75%. Maryland and Louisiana increased sports betting taxes from 15% to 20% and 21.5%, respectively. Illinois added a per-bet fee on top of existing taxes. A proposal in Ohio to double the online tax to 40% was rejected, and Massachusetts has active legislation to raise its rate to as high as 51%.

Prediction markets and sports-event contracts are growing and adding pressure to state tax models. One operator reported more than $500 million in Super Bowl trades and April volume near $15 billion, with about 70% tied to sports. Major sportsbook companies have begun offering or partnering with these platforms to reach customers or enter markets where they do not hold sportsbook licenses. Many prediction markets operate under federal oversight and often fall outside state sportsbook tax structures.

Budget negotiations are ongoing in Raleigh. Any change to the sports betting tax rate would require legislative approval before taking effect. Supporters point to potential new revenue for pay raises and scheduled tax cuts; industry groups and some lawmakers warn higher taxes may change the business environment for regulated wagering.