North Carolina lawmakers are discussing a higher sports betting tax after two years of strong online wagering. The current 18% rate could rise to somewhere between 20% and 30%, although the final number is still not set.
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North Carolina has already collected more than $287M in sports betting taxes since mobile wagering launched in March 2024. Now lawmakers want more revenue from a market that quickly became one of the larger online sports betting states in the US.
WRAL reported that legislators reached a tentative agreement to raise the operator tax rate from 18% to a range between 20% and 30%. Negotiations are still active, and operator pushback could affect the final rate.
House Speaker Destin Hall told WRAL that lawmakers are looking at how North Carolina compares with other states.
“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,” Hall said.
“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,” he added.
North Carolina sits below several major sports betting states on tax rate. New York charges 51%, Pennsylvania charges 34%, Ohio charges 20%, and Illinois now uses a progressive structure from 20% to 40%. North Carolina does not have retail sportsbooks, but it still ranks inside the top 10 for year to date handle.
The tax conversation also comes after a failed attempt last year. The Senate tried to raise the rate to 36% before the 2025 and 2026 state budget passed, but the House did not approve that increase.
A per wager fee has also come up in talks, but lawmakers do not appear ready to use that model. Illinois added a charge of 25 cents per bet on the first 20M wagers and 50 cents per bet after that in 2025. That fee produced almost $11M in March alone, but it also angered major operators and led to warnings about higher betting costs.
North Carolina lawmakers have also discussed a lottery sales tax, although that idea appears less likely.
The Sports Betting Alliance has already tried to turn customers against the tax increase. The group represents FanDuel, DraftKings, Fanatics, bet365 and BetMGM in North Carolina. Its May campaign warned that a higher rate could reduce promotional bets, raise costs for bettors, and weaken funding tied to the legal market.
“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 like me directly.”
North Carolina bettors have wagered more than $15B since launch. March and April alone produced more than $1.3B in handle, helped by conference tournaments and March Madness. The seven online operators, including Caesars and theScore Bet, have generated $1.6B in gross revenue over the last two years.
North Carolina currently taxes online sports betting operators at 18% of gross wagering revenue.
Lawmakers have discussed raising the rate to somewhere between 20% and 30%, according to WRAL.
North Carolina launched online sports betting in March 2024.
The Sports Betting Alliance, which includes FanDuel, DraftKings, Fanatics, bet365 and BetMGM, opposes the higher tax rate.
Lawmakers have discussed it, but WRAL reported that they do not appear set on adding that kind of charge yet.