North Carolina Raises Sports-Betting Tax, Adds 6% Prediction Levy

North Carolina Gov. Josh Stein signed a $34 billion state budget that imposes a 6% tax on net trading revenue from prediction market operators and raises the state sports-betting tax from 18% to 23%. The new rates take effect Jan. 1, 2027.

The 6% levy applies to net trading revenue generated by firms operating prediction markets in North Carolina. The sports-betting increase moves the tax on gross wagering revenue to 23%. Both measures were approved as part of the fiscal plan lawmakers sent to the governor.

Prediction markets are platforms that allow trading on the outcomes of events. The budget does not establish a state licensing or registration system for those operators. Other states that have enacted prediction market taxes paired them with regulatory or registration requirements; North Carolina’s law focuses on taxation without creating a new licensing framework.

At the federal level, the Commodity Futures Trading Commission has filed lawsuits challenging tax and regulatory measures in other states, arguing those statutes seek to regulate markets that the CFTC oversees. Separately, a prediction market operator has challenged a state tax regime in federal court. Those cases concern whether state laws reach markets that federal law covers.

The sports-betting tax increase follows similar changes in other states. Illinois adopted a progressive sports-betting tax schedule in 2024 and added a per-wager tax in 2025. New Jersey raised its online sports-wagering and iGaming tax rates in 2025 to 19.75% from earlier levels. Maryland raised its sports-betting rate to 20% and Louisiana to 21.5% from 15%.

Under the new North Carolina law, operators that offer event-based contracts or other prediction products will be subject to the 6% tax on net trading revenue beginning Jan. 1, 2027, while sports-betting operators will pay the increased 23% levy on gross wagering revenue.