North Carolina raises sportsbook tax; World Cup trading surges

North Carolina’s legislature approved a law that raises the tax on legal sportsbooks from 18% to 23% and requires operators to report individual winnings of $2,000 or more. The measure also bars taxpayers from deducting gambling losses on state returns. The law takes effect only if Gov. Josh Stein signs the bill; lawmakers approved the change in late June.

Under the provision, sportsbooks licensed in North Carolina must transmit records of customer wins of $2,000 or more to the state revenue agency. A recent federal tax rule limits the gambling losses taxpayers can claim to 90% of their winnings for federal purposes.

Legislators framed the higher rate as a way to increase state revenue from legal sports betting. Industry observers and some bettors have warned that mandatory reporting and limited state deductibility are unusual for U.S. state law and may encourage activity on offshore books, informal wagers or prediction markets where state betting rules do not apply.

Prediction market activity around the World Cup has grown rapidly. One exchange reported daily trading volumes above $1 billion beginning June 12 and more than $17 billion processed since the tournament started. On several days, platform volume doubled its prior peaks for major U.S. sporting events earlier in the year. Growth has been driven by multi-leg wagers on player and team outcomes and by demand from bettors in jurisdictions where traditional sports betting remains restricted.

The exchange is pursuing a valuation of about $40 billion in a forthcoming funding round, up from roughly $22 billion at its previous raise. An adviser to the company received equity valued at about $300,000 when the firm’s valuation was under $2 billion.

A prediction market operator filed self-certified contracts tied to player movement that regulators and critics noted could include high school athletes; the operator later withdrew plans to offer next-team markets for college sports. Regulators are reviewing product lists and contract certifications as platforms expand.

Fanatics introduced a Bad Actor Program to suspend or ban users who threaten or harass athletes on social media. Several mainstream sportsbooks already operate programs to close accounts for abusive behavior and to limit harassment of players.

In North Carolina, members of the Lumbee Tribe voted down a proposed constitutional amendment that would have allowed a tribal casino resort. The tribe secured federal recognition in December and had proposed a resort on 241 acres it purchased. The amendment failed with 62% of participating members opposed; supporters cited potential job creation, while opponents raised governance and social concerns.

State tax changes, the new reporting requirement, rising prediction-market volumes and investor interest have drawn attention from lawmakers, operators, investors and regulators monitoring where betting activity occurs and how platforms scale.