North Carolina lawmakers are kicking around sports betting tax changes again to help generate more revenue for the state.
Key Takeaways
- N.C. legislators could raise the tax on sports betting operators from 18% to between 20% and 30%.
- Lawmakers are also discussing a per-wager tax and adding a tax to lottery sales.
- Many of the state's online sportsbooks oppose these changes.
According to a WRAL report, sources say legislators are considering increasing the 18% tax rate on eight sports betting operators to between 20% and 30%. There is also a discussion of adding a per-wager tax, similar to Illinois.
Negotiations are reportedly going on behind the scenes as lawmakers are looking for ways to raise state employee salaries, which Republicans recently agreed to, with the upcoming budget.
An additional tax on lottery sales is also being discussed among options to help pay teachers and state workers more money. WRAL’s report said it is unknown if lawmakers support the suggested gaming tax increases.
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Controversial tax
Last year, North Carolina’s Senate added a 36% tax rate to its budget, but the House ultimately didn’t approve of the increase, and since the two sides couldn’t negotiate, the rate remained at 18% for 2025/2026.
That’s where it’s been since North Carolina online sports betting launched in March 2024, which has generated more than $287 million surplus for the state.
Adding in a per-wager tax is sure to upset industry leaders and the state’s consumers. Illinois' surcharge, the first ever in the U.S., went into effect last summer, creating an additional $20 million for the state in the first two months of 2026 alone.
However, sports betting companies, including many operating in North Carolina, greatly opposed Gov. JB Pritzker’s tax, which costs online sportsbooks 25 cents for the first 20 million bets and 50 cents thereafter.
Illinois operators have passed the cost on to customers through surcharges and higher betting limits to offset the per-wager tax and are concerned that this could force bettors to the unregulated market, harming the legal sports betting ecosystem.
Taking action
The Sports Betting Alliance, which is made up of FanDuel, DraftKings, bet365, BetMGM, and Fanatics, opposes any changes to North Carolina’s tax system. FanDuel sent out an email to customers late last week, warning that “some lawmakers in Raleigh want a brand new tax hike on N.C. fans.”
The operator added that “if we don’t stop them, bettors like you will pay the price” and that “your gameday gets more expensive every time you open the app.” FanDuel asked customers to “take action” by sending a letter through the SBA’s website asking lawmakers to oppose the hike.
“Legal sports betting is generating real revenue for collegiate athletic departments across the state,” the letter states. “A tax hike would threaten that funding and hit fans like me directly.”
