90%
75%
USA
Canada
Australia
UKNorth Carolina Approves Sports Betting Tax Increase
Key Highlights
- North Carolina’s budget raises the sports betting tax rate from 18% to 23%.
- The budget passed both legislative chambers before being signed by Gov. Josh Stein.
- UNC and NC State will each receive up to $5.8 million annually from sports betting tax revenue.
North Carolina Gov. Josh Stein on July 7 signed the new state budget, approving a significant tax increase for sports betting operators. The budget also has revenue implications for the University of North Carolina and NC State.
Sports Betting Tax Increases From 18% to 23%
North Carolina’s recently approved budget raises the tax on sports betting operators from 18% to 23%, adding a higher cost structure to a market that launched in March 2024. Lawmakers sent the $34 billion budget to Gov. Stein after it passed the Senate, 35-10, and the House, 88-21.
The sportsbook tax increase arrives alongside another gambling-related change: the authorization and taxation of prediction markets, albeit at a much lower rate of 6% of net revenue. These decisions have already widened the debate over how North Carolina should tax betting products that may overlap with traditional sportsbooks.
Prediction Markets Raise Revenue Questions
Since the state legalized online sports betting, North Carolina online casinos and sportsbooks have contributed more than $287 million in tax revenue. That money has gone to the state’s general fund and select universities, giving lawmakers a clear reason to protect the tax base as betting activity changes.
Some lawmakers worry prediction markets could cut into that revenue, especially with much lower tax rates. Sportsbooks also pay a $1 million license fee to operate in the state.
The taxation gap has raised concerns that sports betting brands could shift activity into prediction market products to reduce their tax obligations. Sen. Julie Mayfield warned that sports betting revenue could drop sharply if that happens, affecting state budgeting and university athletic programs.
UNC & NC State Added To Revenue Mix
The budget also changes how sports betting tax revenue is distributed to universities. Schools with smaller athletic departments previously benefited from sportsbook tax revenue, but UNC and NC State will also now receive a share.
The two NCAA Division-I schools will each receive up to $5.8 million per year from sports betting tax revenue. The move follows arguments from officials at the flagship schools that their teams are among the most bet on in the state and should share in the proceeds.
The tax hike also comes after lawmakers approved a separate reporting change for operators of sports betting sites. Under SB 595, operators must report bettors who collect more than $2,000 in winnings, giving the state another way to verify taxable income.
