North Carolina Legislators Consider Raising Taxes on Legal Sports Betting

Over the past two years, legal sports betting in North Carolina has brought a quarter of a billion dollars to the state. But state legislators believe it could be as much as double that, and they’re considering finding out if they’re right.

North Carolina’s General Assembly has discussed raising the state’s tax on legal sports betting operators, which could take the state’s tax rate from 18% to as high as 36%. If passed, the Tar Heel State would jump to one of the highest tax rates for legal sports betting in the country.

Notably, it’s not the first time North Carolina has discussed this. Last year, the North Carolina Senate included a tax raise to 36% for sportsbook operators in its annual budget. The state House, however, did not raise the tax rate in its version. The two sides could not agree, leaving the tax rate where it was.

Last time, the Sports Betting Alliance, a partnership between the largest sportsbooks in the nation, openly campaigned against the tax increase. They’ve done so again, although one of their websites opposing the increase has already come down. That suggests North Carolina legislators might already be backing away from this proposal.

Raising the sportsbook tax rate isn’t the only proposal on the table. Legislators have also discussed taxing individual sports bets, as well as bets on the state lottery. However, the lack of details and the political climate of North Carolina likely make those ideas a non-starter.

Why Does North Carolina Want to Raise Taxes on Legal Sports Betting?

The state is looking for any way to raise its revenue. North Carolina has committed itself to raising pay for state employees and teachers, which requires a new source of revenue.

Taxing legal sports betting appears to be one of the most reliable ways to raise revenue. North Carolina’s gambling market is one of the newer ones in the nation, having been legalized in 2024. In April, the state reported a 6% increase in sports betting handle compared to April 2025. In more active sports months, such as September, the state has seen increases of 20% or more.

North Carolina also has an advantage in its geography. While Virginia offers lower tax rates on legal sports betting, southern neighbors South Carolina and Georgia don’t allow sports betting at all. Of the state’s five largest cities, only Winston-Salem is within an hour’s drive of another state that permits gambling on sports.

What Is the Likelihood Of a Tax Increase Becoming Law?

If a tax increase on legal sports betting in North Carolina takes effect, it’s likely to be on the sportsbooks. North Carolina Gov. Josh Stein is a noted supporter of legal sports betting. He’s also championed allowing residents to deduct their gambling losses, and would seem unlikely to sign any tax increase on North Carolina bettors.

Unlike in previous years, North Carolina Republicans do not have enough votes to override a governor’s veto. North Carolina law only requires a three-fifths vote in both chambers of the General Assembly to override a veto. But the state house is one vote short among Republicans, while the state senate’s Republicans could not lose a single vote.

That means North Carolina Republicans have to work with Stein and the Democrats, who have been favorable to expansions of sports betting. That, plus the difficulty of taxing bets, make the legislature more likely to target the sportsbooks.

What’s the Timeline For Legislation?

The North Carolina General Assembly technically has until August before its session adjourns. However, the legislature’s failure to pass a budget last year means it’s operating on a tight schedule.

Traditionally, most of the work for the legislative session gets done in odd-numbered years. That didn’t happen, so the state will try to cram two sessions’ worth of work into one. That might mean provisions like this fall by the wayside, especially if Stein opts to veto such legislation.

If passed, such a provision would likely take effect immediately, as North Carolina’s new fiscal year begins July 1.