North Carolina lawmakers have reached a preliminary agreement to increase taxes on online sports bettingoperators as part of wider budget negotiations, seeking additional revenue from an industry that has exceeded early expectations.
Since legal online sports wagering launched in March 2024, the state has collected more than $287 million in tax revenue. Bettors have placed more than $15.3 billion in wagers, including promotional bets, making sports betting one of North Carolina’s fastest-growing revenue sources.
Discussions have focused on raising the current 18% operator tax rate. Sources familiar with negotiations indicate lawmakers are considering a figure between 20% and 30%, with talks centering on the lower end of that range.
Strong Betting Activity Fuels Tax Debate
House budget writer Donny Lambeth confirmed that both legislative chambers have agreed in principle to increase the rate, although negotiations remain ongoing.
The proposal follows a failed attempt last year when the Senate backed a 36% rate while the House retained the existing tax structure.
House Speaker Destin Hall pointed to the success of the market when discussing possible changes.
“It’s been a tremendously successful policy in this state,” Hall said. “A lot of people apparently like to do that sort of thing for one reason or another. Got a lot of revenue to the state. I think, on our side of the building, it’s more so looking at, ‘How do we line up with other states?’ We want to be on the average of what other states are doing on a lot of these rates. A lot of the ideas are out there. I think we’re somewhat hesitant to tweak too much a program that’s worked pretty well for the state all things considered.”
North Carolina’s current rate remains lower than several major sports betting states, including New York, which taxes operators at 51%. Illinois uses a sliding scale ranging from 20% to 40%, while Ohio applies a 20% rate.
Other Revenue Ideas Lose Support
Lawmakers have also examined taxes on individual wagers and lottery sales. However, those proposals have faced practical and political challenges, leaving an operator tax increase as the preferred option.
A per-wager tax similar to the system adopted in Illinois was discussed but has not gained significant momentum.
Operators Push Back Against Proposal
Sports betting operators have opposed any increase through the Sports Betting Alliance, whose members include FanDuel, DraftKings, Fanatics, bet365 and BetMGM.
In a statement, the group said: “This tax hike will only penalize licensed, regulated companieswho have delivered hundreds of millions in tax revenue to the state and the UNC System athletic departments. 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.”
Lawmakers are also considering adjustments to the distribution of sports betting tax revenue. Sources say the University of North Carolina and North Carolina State University could begin receiving funding under a revised formula.
Legislative leaders hope to finalize the broader state budget before the new fiscal year begins on July 1.
Source:
“Looking for revenue, NC lawmakers agree to raise taxes on sports gambling operators”, wral.com, Jun 7, 2026
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