The two largest universities in North Carolina are reportedly included in a budget proposal that would finally allow the institutions to receive tax revenue from sports betting.
According to a WRAL News report, a new budget proposal is expected to include the University of North Carolina (UNC Chapel Hill) and North Carolina State University as institutions that are eligible to receive a portion of tax revenue from sports betting.
The budget proposal makes a major change to North Carolina’s tax model for sports betting. Under the state’s current rules, a $300,000 annual payment derived from sports betting revenue is made to all 13 institutions that are part of the UNC System.
The schools in the system are also eligible to receive 20% of the remaining tax revenue from wagering after the state’s allocation requirement. Youth sports programs, gambling addiction treatment programs and the state’s general fund also receive revenue.
The new budget would change that state’s current tax model for sports betting, allowing UNC Chapel Hill and NC State to finally benefit from sports betting as the UNC System does not currently include the two institutions. Its current membership includes:
- Appalachian State
- East Carolina
- Elizabeth City State University
- Fayetteville State
- North Carolina A&T State
- North Carolina Central
- UNC Asheville
- UNC Charlotte
- UNC Greensboro
- UNC Pembroke
- UNC Wilmington
- Western Carolina
- Winston-Salem State
Bigger slices of NC sports betting pie
The new budget also increases base annual payments to around $400,000 for each school.
The ability to receive a portion of tax revenue could bode well for NC State and UNC Chapel Hill, with the two schools competing at the Power Four level in all sports. The tax revenue could also alleviate infrastructure costs for the schools in the NIL era.
The universities are the two largest in North Carolina in terms of enrollment, with NC State at roughly 37,300 students. Meanwhile, UNC Chapel Hill has an enrollment of 32,200.
Appalachian State, UNC Charlotte, and East Carolina reportedly might also benefit from the proposed increase in tax payments as the institutions also field NCAA FBS football teams.
WRAL did not detail who is spearheading the effort that supports UNC Chapel Hill and NC State. SBC Americas reached out to Senate leader Phil Berger for comment. Berger has been outspoken about North Carolina gaming, including gambling deductions.
What do NC schools do with sports betting tax revenue?
The tax revenue proceeds are used by the universities to support operations and infrastructure upgrades, including the renovation of sports fields and team facilities.
Development of an 85,000-square-foot indoor practice facility at Appalachian State is one example. About $3.3 million of sports wagering tax revenue will be used for the project, which has an estimated total cost of $29 million. The project, the Sofield Family Indoor Practice Facility, is expected to completed in September 2026.
Potential more tax changes coming to North Carolina
The forthcoming budget proposal also includes a new general tax rate for sports betting.
According to a report from WRAL News, the state’s new tax rate is set at 23% in the new budget proposal. The budget proposal aims to increase the state’s current tax rate of 18%.
The proposal was included in the Senate’s budget, but is receiving pushback. The Sports Betting Alliance (SBA) has voiced its opposition of another tax hike in a U.S. market.
“This tax hike will only penalize licensed, regulated companies who have delivered hundreds of millions in tax revenue to the state and the UNC System athletic departments,” the SBA told WRAL News. “We urge state leaders to instead focus on strengthening the legal framework that protects players, supports jobs, and keeps illegal and unregulated operators out of North Carolina.”
Last year, Senate members proposed doubling North Carolina’s current tax rate. The effort to impose a 36% rate was passed by the Senate, but failed to garner support in the House.
North Carolina budget acknowledges prediction markets
Prediction markets that are operating in North Carolina are also facing a tax in the budget. The proposal aims to tax prediction markets at a 6% rate on net trading fee revenue.
The tax obligation would go into effect on Jan. 1, 2027. The proposed prediction market tax would affect the bottom line of North Carolina sportsbooks that also operate or have partnerships in the prediction market space.
The operators include DraftKings, FanDuel, and Fanatics.
Louisiana also using tax revenue to support schools
The arms race of college athletics is also being supported by tax revenue in Louisiana.
Last June, Gov. Jeff Landry signed a bill increasing the state’s online sports betting tax rate from 15% to 21.5%. The measure, House Bill 639, requires a portion of sports betting tax revenue to be allocated toward the Supporting Programs, Opportunities, Resources and Teams Fund (SPORT Fund). The fund supports student-athletes.
About 25% of the state’s tax revenue is distributed to 11 college athletic departments. The funds are used to support scholarships, insurance, facility upgrades, and medical coverage.
