- Members of the North Carolina Senate introduced their budget proposal
- The two-year budget includes a 100% increase to the state’s sports betting tax rate
- If approved, North Carolina’s sports betting tax rate will increase to 36%
North Carolina lawmakers will be the latest to consider an increase to their state’s sports betting tax rate.
Members of the Senate introduced their two-year, more than $65 billion state budget on Monday. The proposed budget includes a 100% increase to the North Carolina sports betting tax rate.
If approved, North Carolina’s new rate will increase from 18% to 36% of gross wagering revenue for sports betting operators.
Doubling the Tax Rate
The North Carolina Senate will begin moving the budget – $32.6 billion in 2025-26 and $33.3 billion in 2026-27 – through the chamber this week. After being approved, it will then move to the House, where representatives will make their own amendments to the document.
If the new 36% tax rate is approved, it will go into effect for all licensed North Carolina sports betting operators on Oct. 1, 2025. The new rate will potentially put North Carolina near the top of the list for state sports betting tax rates. New York, New Hampshire, and Rhode Island feature the highest sports betting tax rates in the county at 51%, with Delaware next at 50%.
Illinois features a tiered sports betting tax rate that tops out at 40%. North Carolina would be aligned with Pennsylvania, which also taxes sports betting at a 36% rate.
North Carolina launched sports betting in March 2024. Through its first 13 months of operation, the state has reported $751,975,244 in gross sports betting revenue. This has resulted in more than $135.35 million in total sports betting tax revenue for the Tar Heel State.
If the tax rate is increased to 36%, the state would have taken in more than $270.7 million in sports betting tax revenue during the same time period.
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Several States Have Considered Rate Increases
North Carolina is the fourth state in the last six months to consider an increase to its sports betting tax rate, joining Maryland, New Jersey, and Ohio.
Maryland lawmakers recently unveiled the framework for their next budget, which increases the sports betting tax rate from 15% to 20%. When Gov. Wes Moore (D) released his budget plan in January to address the state’s $3 billion deficit it included a proposal to increase the sports betting tax rate to 30%.
Ohio lawmakers also introduced a budget that included an increase to the state’s sports betting tax rate from 20% to 40%. Ohio lawmakers previously agreed to increase the state tax rate from 10% to 20% in 2023, just several months after launching sports betting.
However, the tax rate increase proposal has since been dropped from budget considerations.
New Jersey Gov. Phil Murphy (D) also recently presented a record-setting $58.05 billion budget, which includes a tax rate increase to 25% of adjusted revenues for both online sports betting and iGaming.
The state currently taxes iGaming and online sports betting at a rate of 15% and 13% of adjusted revenues, respectively.
The state of North Carolina is currently considering a potential increase in the tax rate on sports betting. This comes as the state looks to maximize revenue from this rapidly growing industry.
Currently, North Carolina imposes a tax rate of 8% on sports betting revenue. However, lawmakers are now considering raising this rate to as high as 15%. This increase would bring North Carolina more in line with other states that have legalized sports betting, such as New Jersey and Pennsylvania, which have tax rates of 9.75% and 36% respectively.
Proponents of the potential tax increase argue that it would generate much-needed revenue for the state, which could be used to fund education, infrastructure, and other public services. They also argue that a higher tax rate would help to ensure that the state benefits more from the profits generated by sports betting operators.
On the other hand, opponents of the tax increase argue that it could drive sports betting operators out of the state or discourage new operators from entering the market. They also argue that a higher tax rate could lead to lower payouts for bettors, which could ultimately hurt the overall growth of the industry in North Carolina.
Ultimately, the decision on whether to increase the tax rate on sports betting in North Carolina will come down to a balance between maximizing revenue for the state and ensuring a competitive and thriving sports betting market. Lawmakers will need to carefully consider the potential impacts of any tax increase before making a final decision.