North Carolina Agrees to Raise Sports Betting Tax Rate

North Carolina lawmakers have reached an agreement to increase the state's sports betting tax rate, marking the latest effort by a U.S. state to generate additional revenue from its growing online wagering market.

According to reports from local media and legislative sources, lawmakers have tentatively agreed to raise the tax paid by licensed sportsbook operators above the current 18% rate. While the final figure has not yet been formally approved as part of the state's budget process, discussions have centered on a rate between 20% and 30%, with sources indicating lawmakers have settled on a number near the lower end of that range.

The increase would come just over two years after North Carolina launched legal online sports betting in March 2024. Since then, the market has significantly outperformed expectations, generating more than $287 million in tax revenue for the state and attracting over $15 billion in wagers.

Strong Revenue Drives Tax Discussion

Sports betting has quickly become one of North Carolina's fastest-growing sources of gaming-related revenue.

The state's eight licensed operators currently pay an 18% tax on gross wagering revenue. Lawmakers have pointed to the market's strong performance as a reason to revisit that rate while working through broader budget negotiations. House Speaker Destin Hall recently described sports betting as a successful policy for the state, noting that revenue collections have exceeded initial projections.

North Carolina currently sits near the middle of the pack nationally when it comes to sportsbook taxation. Neighboring Virginia taxes sports betting revenue at 15%, while Tennessee's effective rate is roughly 20%. At the other end of the spectrum, states such as New York apply a 51% tax rate to sportsbook revenue.

The proposed increase follows a broader trend across the United States, where several states have revisited sports betting tax structures after seeing stronger-than-expected market performance. Illinois recently moved to a graduated tax system, while lawmakers in Maryland, Ohio, and New Jersey have also explored potential increases.

Sportsbooks Push Back Against Higher Rates

The proposal has already drawn criticism from sportsbook operators and industry groups.

The Sports Betting Alliance, which represents several major operators, argues that higher taxes could reduce investment in the regulated market and make it more difficult for licensed sportsbooks to compete against unregulated alternatives. The group has launched a campaign encouraging North Carolina residents to contact lawmakers and oppose the proposed increase.

Industry representatives have also warned that higher operating costs can eventually impact promotional offers, marketing spending, and other customer-facing initiatives. Similar arguments have surfaced in other states whenever lawmakers have considered raising sportsbook tax rates.

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Budget Negotiations Still Ongoing

Although lawmakers appear to have reached a tentative agreement, the increase has not yet been finalized.

The tax change is expected to be included as part of North Carolina's broader budget negotiations, meaning details could still change before the final spending plan is approved. Previous proposals have ranged from modest increases to significantly higher rates, including a Senate-backed plan last year that would have doubled the tax rate to 36%.

For now, North Carolina appears set to join a growing list of states seeking a larger share of sports betting revenue as legal wagering continues to mature across the U.S. market.

Stay tuned to UMG Gaming for more updates on prediction markets, legal developments, and the evolving U.S. regulatory landscape.