North Carolina Considering Sports Betting Tax Increase to Fund State Employee Raises

Posted on: May 19, 2026, 11:26h. 

Last updated on: May 19, 2026, 11:26h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.
  • Sports betting taxes could be a focal point of North Carolina’s budget talks
  • Gov. Stein is seeking $3 billion in additional spending
  • Taxes from sports betting are relatively trivial for state governments

North Carolina lawmakers are considering an increase to the state’s tax on sports betting.

North Carolina sports betting tax
Cameron Crazies cheer on the Duke Blue Devils at Cameron Indoor Stadium in Durham, North Carolina, on Nov. 23, 2025. Lawmakers in Raleigh are said to be reviewing a hike to the sports betting tax in North Carolina. (Image: Getty)

WRAL News in Raleigh was first to report on speculation that the forthcoming budget negotiations might include raising how much revenue sportsbooks are required to share with the state.

Currently, oddsmakers face an 18% tax on their gross revenue. That’s roughly in the middle of states that regulate and tax sports gambling. New York, Rhode Island, New Hampshire, and Oregon have the highest sports gambling tax at 51%. Nevada and Iowa have the lowest at 6.75%.

Sports Betting Taxes Are Relatively Small

North Carolina Gov. Josh Stein (D) has big plans for the 2026-27 fiscal year.

The Democrat wants to provide nearly $380 million in tax cuts to lower- and moderate-income families. He’s also seeking “long-overdue pay increases for state employees and retirees” that will cost $804 million.

Stein wants increased funding for public education and child care, and to give teachers raises, $1,500 bonuses, and $300 supply stipends. The governor additionally seeks $40 million for community college workforce development programs, $14 million for apprenticeship initiatives, and 10% salary increases for state public safety and law enforcement officers.

Sports betting, of course, can’t fund it all. In fact, such gambling funds very little.

During the state’s 2025 fiscal year (July 2024 through June 2025), the North Carolina Lottery Commission reports that sports betting taxes from retail and online wagering totaled less than $116.6 million. Oddsmakers took $6.6 billion in bets, and kept $647.7 million of the action.

Even at a higher levy, say 30% compared with 18%, the sports betting tax would only grow to $194.3 million. That would deliver the state $77.7 million in additional funding from sports betting.

Stein’s $35.44 billion budget proposal includes almost $3 billion in increased state spending from the prior year.

Higher Taxes, Less Play 

Sportsbooks in states where higher taxes and new fees have been implemented have been forced to pass along some of the costs to consumers. That comes via tighter odds, fewer promotions, and scaled-back customer retention incentives.

In Illinois, for example, bettors placed five million fewer bets in the first full month after the state imposed a per-bet fee on every bet made. The Sports Betting Alliance, which lobbies on behalf of FanDuel, DraftKings, BetMGM, Fanatics, and bet365, says higher sports betting taxes drive bettors back to offshore sportsbooks and local bookies where there are no consumer safeguards or associated tax revenue.

All five SBA members operate in North Carolina. The group will almost certainly lobby against any proposed sports betting tax hike considered during the budget talks.

North Carolina’s 2026 legislative session runs through August. The General Assembly hopes to finalize its budget next month.