A group of North Carolina lawmakers think it’s only fair that bettors should be able to deduct their gambling losses on their taxes.
Introduced on Wednesday, House Bill 14 would allow for a state income tax deduction for losses against bettors’ winnings, effective as of the 2024 tax year. North Carolina only launched legal online sports betting on March 11, so this is the first tax season since it was legalized.
Currently, gambling winnings in the state need to be included as income and are taxed at the same 4.5% rate as the rest of residents’ incomes, with losses not deductible. North Carolinians have to pay taxes on their winnings, regardless of whether they made or lost money overall during the fiscal year. If a bettor won $1,000 betting on sports but lost $2,000, they would still owe income tax on the $1,000.
The state bill would only apply to those who itemize the deductions, and bettors would not be able to write off more than their betting winnings.
A matter of ‘fairness’ and ‘clarity,’ says bill sponsor
At the federal level, bettors can deduct gambling losses on their tax returns, but ten states, including North Carolina, currently allow it. Rep. Erin Pare, one of the bill’s primary sponsors, told WRAL News that she sees it as a “fairness” and “clarity” issue.
“There’s a lot of confusion right now since sports gambling is a new thing in North Carolina, that most people who have been engaging in that over the last year made the assumption that the state laws around this were the same as federal,” said Pare. “This is just the right thing to do for the people.”
However, state Senate leader Phil Berger is not in favor, noting to WRAL that it has “never been the policy in North Carolina to allow, at the state level, deduction of or the balancing of losses versus gains.”
In North Carolina, sports bettors wagered more than $5.3 billion in just over nine months of 2024, winning more than $4.7 billion.