North Carolina lawmakers have settled on a 5% tax rate increase on sports betting operators.
Key Takeaways
- North Carolina lawmakers agreed earlier this month to raise the operator tax.
- The Tar Heel State will move ahead of New Jersey, Ohio, and Massachusetts in tax rate.
- The 23% rate would have generated roughly $37 million more in revenue this fiscal year.
Sen. Jim Burgin confirmed sportsbooks will begin paying out 23% of their revenue to North Carolina, according to WRAL’s Brian Murphy, up from the 18% tax rate imposed when online sports betting launched in March 2024. Lawmakers are still finalizing portions of the budget before the July 1 start of the new fiscal year, but the 23% rate has been agreed upon.
I reported previously that North Carolina was going to raise tax on sports betting operators to 23%. NC Sen. Jim Burgin confirmed that number today. Said he wanted 50%. Senate previously put 36% in last year's proposal. https://t.co/3Gzisei0iZ
— Brian Murphy (@murphsturph) June 18, 2026
Legislators reportedly reached an agreement earlier in June to increase the operator tax to somewhere between 20% and 30%. The 23% rate ends a long-running debate among lawmakers despite opposition from operators.
The North Carolina Senate proposed a 36% tax rate for mobile sportsbooks to the budget last summer, but the House declined to change the structure.
Enjoying Covers content? Add us as a preferred source on your Google account
Moving on up
Burgin wanted a 50% tax rate that would’ve been among the highest in the U.S. Operators in New York, New Hampshire, and Rhode Island share 51% of their revenue with those states. Delaware is at 50%.
Pennsylvania imposes a 36% rate, while Illinois uses a progressive structure that starts at 20% and goes up to 40% of operator revenue.
The new North Carolina sports betting tax rate will push the state ahead of New Jersey (19.75%), Massachusetts (20%), and Ohio (20%).
“I think, on our side of the building, it’s more so looking at, ‘How do we line up with other states?’ We want to be on the average of what other states are doing on a lot of these rates,” House Speaker Destin Hall told WRAL earlier this month. “A lot of the ideas are out there. I think we’re somewhat hesitant to tweak too much a program that’s worked pretty well for the state, all things considered.”
Major generator
Sports betting has become a lucrative business and a major tax generator for North Carolina over the last two years.
FanDuel, DraftKings, Caesars, BetMGM, bet365, theScore Bet, Fanatics, and Underdog - the latter of which left the market in December 2025 - have hauled in over $1.6 billion in all-time North Carolina revenue.
The state has collected nearly $300 million from online operators under the 18% tax rate, including $133 million during the 2025/2026 fiscal year. Under a 23% tax rate, North Carolina would have collected $170 million during that span.
The Sports Betting Alliance and its member operators pleaded with the state’s residents to oppose the tax hike, warning that customers “would pay the price.”
“Legal sports betting is generating real revenue for collegiate athletic departments across the state,” FanDuel said to customers in an electronic letter. “A tax hike would threaten that funding and hit fans.”
