North Carolina’s online sportsbooks could soon be paying quite a bit more to the state.
The Senate budget proposal that was put forward on Monday, which outlines priorities for the 2025–27 fiscal cycle, includes a provision to double the sports betting tax rate in the Tar Heel State.
Currently, sportsbooks in the country’s newest active online sports wagering market pay 18% of their gross revenue in tax. The incumbent Republicans want to double that to 36%.
That would put North Carolina behind only New York (51%), New Hampshire (51%) and Delaware (50%) and level with Pennsylvania in terms of flat sports betting tax rates. On Illinois‘ sliding scale, FanDuel and DraftKings pay 40% as a result of their high revenues, while other sportsbooks pay proportionately less.
Tax revenue already outpacing predictions
North Carolina launched legal online sports betting on March 11, 2024. State figures show that the state’s eight legal operators — bet365, BetMGM, Caesars, DraftKings, ESPN Bet, FanDuel, Fanatics and Underdog — have paid more than $135 million in taxes through the end of March 2025.
That is far ahead of the estimates that were cited when sports betting legislation was debated in the legislature before being passed. As reported by the Associated Press, state legislative researchers had estimated that sports betting tax revenues could reach $100 million annually within five years; the state beat that target by a distance in the first of those five years alone.
Overall, the Senate expects that doubling the sports betting tax could generate $53.4 million more for the state in FY 25-26 and $79.8 million more in FY 26-27.
In addition, the proposal would increase the amount of online betting tax revenue that goes towards UNC System schools.
Currently, the athletic departments at 13 University of North Carolina (UNC) System schools each receive a flat $300,000 of the state’s betting tax takings plus 20% of the remaining proceeds after other initial required distributions are made. Under the new framework, schools would receive a minimum of $500,000, with some getting as much as $1.5 million. UNC and NC State would be added to the list of schools that receive that funding.
Other states have looked to shift tax
After Illinois’ switch last year to a graduated tax rate, other states have looked to move the needle this year.
Ohio Gov. Mike DeWine’s effort to double the sports betting tax rate from 20% to 40% was scratched from the budget by lawmakers last week after it lost support in his own party. In Maryland, Gov. Wes Moore also failed to double the rate from 15% to 30% and even a lesser increase to 20% died.
New Jersey Gov. Phil Murphy’s proposed budget included increasing the respective taxes on both sports betting and online casino to 25%.
One of the more notable suggestions has come in Massachusetts, where a filed bill would increase the rate to match New York’s nationwide high of 51%, as well as making other sweeping changes to the sports betting market.
NC bills could tweak betting market
While lawmakers are expected to pass the budget proposal, there are other bills in play in North Carolina that could alter the state’s nascent betting market.
The bipartisan Keeping Our Coaches Act in the Senate would dedicate $11 million of sports wagering tax revenue to help pay high school coaches from the start of the next school year.
Meanwhile, House Bill 828 would expressly ban prop bets on college athletes. One of that bill’s sponsors, Rep. Marcia Morey, filed the same version of the bill last year but it failed to gain any momentum. In addition to banning prop bets, the bill would also restrict wider betting on-site at collegiate sporting events before and during games.
