
North Carolina lawmakers are seeking to double the state’s sports betting tax to 36%.
Republicans from the state Senate released their two-year budget on Monday, calling to increase the tax rate on North Carolina’s eight sportsbooks from 18% to 36%. Senate Bill 257, if approved, would go into effect Oct. 1.
The move is intended to generate additional revenue from the burgeoning sports betting industry. During its first year of operation, the state collected approximately $128 million in tax revenue, outperforming most expectations prior to the March 2024 launch.
North Carolina’s eight active operators are bet365, BetMGM, Caesars, DraftKings, ESPN Bet, Fanatics, FanDuel, and Underdog. A maximum of 12 licenses can be issued.
Where the Additional North Carolina Tax Revenue Would Go
Under the current structure, the athletic departments at 13 UNC System schools receive $300,000 from North Carolina sports betting tax revenue and 20% of the remaining proceeds following other distributions. The new budget calls for allocating between $500,000 and $1.5 million based on tiers and splitting the remaining 20% of funds.
Notably, UNC and NC State would be added to the revised distribution list, each receiving 10% of the funds following the issuance of required funds.
There is also a clause mandating that UNC and NC State schedule more games with other schools in the UNC System to bolster in-state rivalries. Lawmakers suggest that by the 2039-40 season, they play at least three regular-season or exhibition basketball games against all four UNC System schools at the Division II level and two in the regular season against Division I schools.
“This is tied to the sports gambling changes,” a Senate Republican spokesperson said via WRAL. “With (NC) State and UNC in at a new ‘power conference athletics’ tier for the sports gambling revenue, it is our intent that they play the other system schools.”
Tax Rate Hikes Becoming a National Trend
North Carolina is far from the first state to seek changes to its sports betting tax.
Ohio hiked its rate from 10% to 20%, and Gov. DeWine was considering raising it again to 40%, while Illinois implemented a sliding scale up to 40%. Kansas, whose current rate of 10% is one of the lowest in the country, is also considering a change.
Sports betting expansion has slowed since the Tar Heel State launched operations. Thirty-eight states plus Washington, D.C., now allow some form of sports betting, with Missouri on deck for this fall. A few other states, including Hawaii, are in active legislation.
According to the North Carolina State Lottery Commission, North Carolinians placed more than $6.6 billion in bets during the first year of legal sports betting, resulting in approximately $713 million in gross wagering revenue.
A record $685 million was wagered last month, surpassing the previous record handle of $659.3 million in March 2024. Despite that, gross wagering revenue fell 31% from the previous month to $38.1 million.