- Members of the North Carolina Senate this morning approved their version of the state budget
- The budget includes a 100% increase to the state’s sports betting tax rate
- It now moves to the House for discussion and potential approval
State lawmakers have taken a big step towards increasing the North Carolina sports betting tax rate by 100%.
Members of the North Carolina Senate this morning approved SB 257 by a 30-15 vote. The two-year, more than $65 billion budget includes a proposal to increase the state’s sports betting tax rate from 18% to 36%.
The document now heads to the House for discussion and potential approval.
Latest State to Consider Sports Betting Tax Increase
The House will now have the chance to make their own amendments to the two-year budget. The Senate’s budget includes $32.6 billion in 2025-26 and $33.3 billion in 2026-27.
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.
Through North Carolina’s first 13 months of sports betting, the Tar Heel State has reported $751,975,244 in sports betting gross revenue. This has resulted in more than $135.35 million in total sports betting tax revenue.
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 that same time period.
Maryland Also on Track to Increase Tax Rate
North Carolina is not the only state in the lasts several months to consider a change to its sports betting tax rate. Maryland, New Jersey, and Ohio have all considered increases to their rates.
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%.
The increase will likely remain in the budget when eventually approved by both chambers.
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, Ohio lawmakers recently dropped the tax rate increase proposal 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.
In a significant move, North Carolina has recently increased its sports betting tax rate, impacting both operators and bettors in the state. The decision to raise the tax rate comes as the state looks to maximize revenue from the growing sports betting industry.
The new tax rate, which went into effect on January 1st, 2022, sees operators now paying a 8% tax on gross gaming revenue, up from the previous rate of 6.75%. This increase is expected to generate millions of dollars in additional revenue for the state, which can then be used to fund various programs and initiatives.
While the increase in the tax rate may be seen as a burden for operators, it is important to note that North Carolina still maintains one of the lowest tax rates for sports betting in the country. This competitive tax rate has helped attract a number of top operators to the state, driving growth in the industry and providing bettors with a wide range of options.
For bettors, the increase in the tax rate may result in slightly lower payouts on winning bets. However, the impact is expected to be minimal and should not deter bettors from participating in sports betting activities in North Carolina.
Overall, the decision to increase the sports betting tax rate in North Carolina is a strategic move aimed at maximizing revenue for the state while maintaining a competitive environment for operators and bettors. As the sports betting industry continues to evolve, it will be interesting to see how this change impacts the market and whether other states follow suit in adjusting their tax rates.