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North Carolina lawmakers are moving closer to raising the tax rate on the state’s legal sports betting operators as part of ongoing budget negotiations.
According to multiple reports, legislators have tentatively agreed to increase the current 18% tax on gross wagering revenue to a rate somewhere between 20% and 30%, with discussions reportedly centered on the lower end of that range. However, the final rate has not yet been approved and could still change as budget negotiations continue and industry opposition intensifies.
Sports betting operators push back against tax hike
Sports betting operators and industry groups have strongly opposed the proposed increase, warning that higher taxes could negatively affect both operators and consumers.
The Sports Betting Alliance, a lobbying group representing major sportsbook operators, launched a public campaign urging North Carolina residents to oppose the proposal.
A statement published on the campaign’s website said: “When states raise taxes, the costs get passed down to customers — directly hitting your wallet. It punishes NC sports fans who play by the rules and pushes more people toward illegal offshore sites with no consumer protections.”
The Sports Betting Alliance also told WRAL News that the increase would “penalize licensed, regulated companies” that have already generated hundreds of millions of dollars in tax revenue for the state and UNC System athletic programs.
Operators argue that higher taxes could lead to reduced promotional offers, less favorable odds and fewer consumer incentives. Industry representatives also contend that excessive taxation could push some bettors toward unregulated offshore sportsbooks that do not provide the same consumer protections as licensed operators.
North Carolina sports betting revenue continues to surge
Despite industry concerns, North Carolina’s sports betting market has significantly outperformed early projections since launching in March 2024.
According to state figures, bettors have wagered more than $15.3 billion through legal sportsbooks since the market opened. The state has collected nearly $300 million in tax revenue through May 2026, exceeding initial expectations.
House Speaker Destin Hall, R-Caldwell, said lawmakers are evaluating how North Carolina compares with other states when considering a potential increase.
“It’s been a tremendously successful policy in this state,” Hall said. “Got a lot of revenue to the state. I think, on our side of the building, it’s more so looking at, ‘How do we line up with other states?’”
North Carolina currently taxes gross wagering revenue at 18%, placing it near the middle of U.S. sports betting tax rates. By comparison, New York taxes sportsbook revenue at 51%, while neighboring states such as Virginia and Tennessee maintain lower rates.
The state distributes sports betting tax revenue across several programs. Half of the proceeds go to the general fund, while the remaining funds support youth sports initiatives, gambling addiction education and treatment programs, and athletic departments within the UNC System.
The 13 UNC System schools currently eligible for funding have each received more than $4.3 million from sports betting tax revenue since the market launched. Lawmakers are also reportedly discussing changes to the distribution formula that could allow both UNC-Chapel Hill and NC State to receive a share of the funding in the future.
More states consider sports betting tax hikes
North Carolina is part of a broader national trend as states look for new revenue sources amid budget pressures and declining federal funding.
Several states have recently considered or implemented higher sports betting taxes. Illinois, for example, introduced a per-wager fee in 2025, while lawmakers in other states, including Michigan, have discussed similar measures.
Still, regulators and industry stakeholders have cautioned that aggressive tax increases could slow market growth and make legal sportsbooks less competitive against offshore operators.
For now, North Carolina lawmakers are expected to continue negotiations ahead of the state budget deadline, with the final sports betting tax rate still subject to change.
