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North Carolina lawmakers have reached a tentative agreement to increase the state’s sports betting tax rate, though the overall budget has yet to be finalized.
The Tar Heel State currently taxes gross wagering revenue at 18%. Legislators have agreed to raise that figure to somewhere in the 20%–30% range, with talks centered on a figure at the lower end of that range. Multiple reports identify 23% as the likely target.
This marks the second consecutive year lawmakers have pursued a tax increase. During the 2025 budget cycle, the state Senate proposed raising the rate to 36%, but the House declined to include the provision, and it was not adopted.
Sports Betting Alliance lobbies against NC tax hike
Sportsbooks operating in the state have pushed back against the proposed hike. Operators warn that higher taxes could lead to worse odds and fewer promotional offers for customers, and that bettors may turn to illegal alternatives if legal wagering becomes more expensive.
The Sports Betting Alliance has been actively lobbying against the measure. In a statement to WRAL, the group said:
“This tax hike will only penalize licensed, regulated companies who have delivered hundreds of millions in tax revenue to the state and the UNC System athletic departments. We urge state leaders to instead focus on strengthening the legal framework that protects players, supports jobs, and keeps illegal and unregulated operators out of North Carolina.”
The alliance even launched a marketing campaign urging constituents to contact their legislators in opposition.
How North Carolina compares to neighboring states
An increase would push North Carolina’s rate above those of most of its neighbors. Tennessee taxes gross wagering revenue at 19.7%, while Virginia‘s rate sits at 15%. New York and several other states levy 51%. Had a 23% rate been in effect since the market launched, the state would have collected roughly $83 million more in total revenue.
NC sports bettors have wagered more than $15 billion
North Carolina has collected more than $287 million in taxes since online sports betting launched in March 2024, far exceeding initial projections. Including promotional and bonus bets, North Carolinians have wagered more than $15.3 billion since the market opened. Half of tax revenue goes to the state’s general fund, with the remainder split among gambling addiction treatment, education, youth sports, and athletic departments at 13 UNC System schools.
UNC and N.C. State — the two programs that attract the most betting activity — do not currently receive a share of that revenue, though both chambers agreed last year to adjust the distribution formula to include them. Lawmakers have also tentatively agreed this budget cycle to enable both schools to receive funds, potentially matching what the other 13 UNC System schools receive.
House Speaker Destin Hall, R-Caldwell, expressed measured optimism about the program while acknowledging the push to align with peer states:
“It’s been a tremendously successful policy in this state. A lot of people apparently like to do that sort of thing for one reason or another. 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?’ We want to be on the average of what other states are doing on a lot of these rates. 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.”
A more complete budget deal is expected in the coming weeks, with legislative leaders hoping to finalize the full spending plan before the new fiscal year begins July 1.
