North Carolina Sports Betting Tax Could Double Should Lawmakers Have Their Way

Posted on: April 16, 2025, 09:48h. 

Last updated on: April 16, 2025, 10:01h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.
  • Tax rates on North Carolina sportsbooks could be going up
  • Senate Republicans have suggested doubling the online sports betting tax
  • The current levy on oddsmakers is 18%

North Carolina sports betting operators are currently subject to an 18% tax on their gross winnings. Senate Republicans in the Tar Heel State are seeking to double the levy to 36%.

North Carolina sports betting tax
An aerial view of Bank of America Stadium, home of the NFL’s Carolina Panthers. Sports betting revenue collected by licensed online sportsbook operators in North Carolina could see a tax hike. (Image: Shutterstock)

On Monday evening, the North Carolina Senate unveiled its two-year budget. The upper chamber of the General Assembly has proposed a $32.6 billion spending plan that would provide modest pay increases for teachers and other state workers, additional aid for Hurricane Helene victims, and replenish the state’s reserve that took a major hit because of the September 2024 Category 4 storm.

Senate Republicans, who have a 30-20 majority in the chamber, also want to provide more financial athletic support to colleges and universities in the UNC System, the state’s 16 public places of higher learning. To do so, the Senate has proposed significantly raising the effective tax rate imposed on the state’s eight licensed online sportsbook operators.

Tax Increase Impact

North Carolina is among the newest sports betting states, with online wagers beginning in March 2024.

In the state’s 2025 fiscal year, which began July 1, 2024, the six books accepted over $5 billion in bets through March. Oddsmakers kept about $476.8 million of the bets placed on hold of 9.4%. The total handle included almost $180 million in promotional wagers or free bets offered by the books.

On the $476.8 million in gross sportsbook revenue, the state’s share based on the 18% tax was $85,832,055. Should the sports betting tax be doubled, the state’s share through nine months of the 2025 fiscal year would balloon to $171,664,109.

State lawmakers would use the higher proceeds to support UNC System sports. The budget bill would additionally bring UNC at Chapel Hill and North Carolina State University to the sports betting athletic funding distributions.

However, for those schools to receive sports betting tax money, they would need to play every UNC System NCAA Division I basketball program at least two times by the 2039-2040 season. UNC-Chapel Hill and NC State would also need to schedule “at least three regular season or exhibition games against each constituent institution team competing at the NCAA Division II level by the 2039-40 season.”

The UNC-Chapel Hill and NC State provision is known as the “North Carolina Sports Rivalries” in the Senate’s budget outline.

North Carolina Sports Betting Exceeds Expectations 

Since online sports betting began 13 months ago, the North Carolina government has received more than $135 million in associated taxes through the end of March 2025. The tax benefit has exceeded premarket expectations, as North Carolina’s passionate fans have quickly taken a liking to legal sports wagering.

North Carolina is bordered by two states with legal online sports betting.

In Virginia, the state levies a 15% tax on sportsbook revenue. In Tennessee, online sportsbooks pay a 1.85% tax on every bet placed — which equates to roughly 20% — and a hefty annual license fee of $750K.  

Most states where sports betting is allowed take between 10% and 20% of oddsmakers’ revenue. The highest online sports betting tax rate is 51% levied in New Hampshire, New York, and Rhode Island. The lowest is 6.75% in Iowa and Nevada.