North Carolina Senate proposes doubling sports betting tax to 36%

Online sportsbooks in North Carolina may soon face a sharp increase in taxes under a new state Senate budget proposal unveiled Monday. The proposed budget for the 2025–27 fiscal cycle includes a provision that would double the state’s sports betting tax rate from 18% to 36%.

If approved, North Carolina would have one of the highest tax rates in the country—tied with Pennsylvania and behind only New York, New Hampshire, and Delaware, SBC Americas reported.

With the proposed tax hike, lawmakers estimate an additional $53.4 million in revenue for fiscal year 2025–26 and $79.8 million more in 2026–27.

The proposal also includes increased funding for athletic departments across the University of North Carolina (UNC) System. Under current law, 13 UNC schools receive a base of $300,000 from betting revenue and a portion of the remaining funds. The new plan would raise the minimum to $500,000 per school, with some institutions receiving up to $1.5 million. UNC-Chapel Hill and NC State, previously excluded, would now be eligible for the funding.

North Carolina launched legal online sports betting on March 11, 2024. Since then, the state’s eight licensed operators — bet365, BetMGM, Caesars, DraftKings, ESPN Bet, FanDuel, Fanatics, and Underdog — have collectively paid over $135 million in taxes through March 2025.

That figure has significantly outpaced early projections. Legislative analysts had anticipated $100 million in annual tax revenue would be reached within five years; instead, the state exceeded that milestone in less than one.

In its debut month, bettors placed $685 million in wagers—a state record. Over the first year, the total handle hit $6.6 billion, according to the North Carolina State Lottery Commission via SiGMA.

Operators generated $713 million in gross gaming revenue (GGR), with the state collecting $128 million in taxes at an 18% rate. These figures exclude licensing fees.

North Carolina joins a growing list of states considering higher taxes on sports betting amid surging revenue. Last year, Illinois adopted a graduated tax structure, and whilst efforts to double tax rates in Ohio and Maryland fell short, New Jersey and Massachusetts are actively exploring increases.

In New Jersey, Gov. Phil Murphy’s budget proposes raising both sports betting and online casino taxes to 25%. Massachusetts lawmakers are considering a bill that would match New York’s 51% rate and introduce broader reforms.

Alongside the budget proposal, other bills could further reshape North Carolina’s young sports betting landscape. The bipartisan Keeping Our Coaches Act would allocate $11 million in betting tax revenue to fund high school coaching salaries beginning next school year.

Meanwhile, House Bill 828 aims to ban prop bets on college athletes and restrict on-site betting activity during college games. Filed by Rep. Marcia Morey, the measure echoes a similar failed effort from 2024 but could gain traction amid increasing scrutiny of college sports wagering.

Lawmakers are expected to continue debate on the budget and related legislation in the coming weeks.