North Carolina Might Impose 36 Percent Tax on Online Sports Betting

North Carolina is considering a major tax hike on online sports betting under a new state Senate budget proposal for 2025–27. Lawmakers are aiming to raise the tax rate from 18% to 36%, a move that would put the state near the top nationally—on par with Pennsylvania and trailing only New York, New Hampshire, and Delaware.

Good to know

• North Carolina may double its online sports betting tax from 18% to 36%, which would be one of the highest in the U.S.
• UNC schools could receive higher funding from betting revenue, with minimum payouts rising from $300,000 to $500,000.
• Since launch, online sports betting in the state has already brought in more tax revenue than projected for five years.

The updated rate could generate an extra $53.4 million in revenue for the 2025–26 fiscal year and $79.8 million more the year after, according to estimates.

The budget plan also focuses on education. Thirteen universities in the UNC System currently receive a base payout of $300,000 from betting tax revenue. The new proposal would increase that floor to $500,000 and expand eligibility to include UNC-Chapel Hill and NC State. Some schools could receive as much as $1.5 million under the revised structure.

Online sports betting officially launched in North Carolina on March 11, 2024. In just over a year, the eight licensed operators—FanDuel, DraftKings, Caesars, BetMGM, ESPN Bet, bet365, Fanatics, and Underdog—have already paid over $135 million in taxes, far outpacing early projections. Legislators originally estimated it would take five years to hit $100 million in annual tax revenue.

March 2024 brought in a record-setting $685 million in bets. By the end of the first year, total betting handle reached $6.6 billion, with gross gaming revenue landing at $713 million. The state collected $128 million in taxes at the current 18% rate.

Beyond the budget plan, several other bills are in play. One, known as the Keeping Our Coaches Act, would set aside $11 million in tax revenue to help pay high school coaching salaries starting next school year.

Another bill, House Bill 828, is also back in the spotlight. Introduced by Rep. Marcia Morey, it aims to ban prop bets on college athletes and limit in-person betting activities during college games. Although a similar bill failed in 2024, rising concerns about betting in college sports could give this version more momentum.

Other States Rethink Their Rates Too

North Carolina isn’t alone in reconsidering its betting tax structure. Illinois introduced a tiered tax system last year. New Jersey, Massachusetts, and Maryland are now weighing their own increases.