North Carolina’s sports betting market has vastly outperformed initial forecasts, with total wagers exceeding $6.6 billion in its first full fiscal year—an achievement that wasn’t expected for another three years. The North Carolina Lottery Commission, in its June 2025 revenue update, confirmed the staggering milestone that has set the state ahead of schedule by a wide margin.
The fiscal research division had initially estimated that the $6.6 billion handle would only be reached by the 2027-28 fiscal year. However, between July 2024 and June 2025, bettors across the state placed $6.4 billion in real money wagers, alongside $222,000 in promotional bets, to surpass that total. The state’s sportsbooks returned $5.9 billion in winnings, amounting to more than 89% of the total wagering volume.
During June 2025 alone, the total handle reached $420.7 million—a slight increase from the $398 million wagered in June 2024. Although this was the lowest monthly handle of the year, it still marked an 8.8% year-over-year improvement.
Tax Revenue Soars, Exceeding Original Projections
North Carolina’s eight licensed sportsbooks—including FanDuel, DraftKings, Caesars, BetMGM, bet365, ESPN Bet, Fanatics, and Underdog—produced $647.7 million in gross wagering revenue over the fiscal year. With the current 18% tax rate, this translated into approximately $116.6 million in tax revenue, far surpassing the original FY 2025 projection of $53 million.
Lawmakers had not anticipated reaching the $100 million tax revenue milestone before FY 2028. In fact, total tax collections since the March 2024 launch have already reached about $166 million, according to the latest reports.
In June 2025 alone, sportsbooks generated $58.1 million in revenue and contributed $10.4 million in taxes—an increase of more than $3 million compared to the same period the year prior.
Lawmakers Eye Revisions Amid Strong Performance
The unexpectedly strong financial performance has prompted renewed legislative interest in adjusting North Carolina’s betting framework. Notably, the Senate proposed a controversial increase to the tax rate, aiming to raise it from 18% to 36% in its latest budget. If enacted, North Carolina would join states like New York and Delaware among those imposing the highest tax rates on sportsbook operators.
However, this proposal was met with considerable opposition. The House version of the budget ultimately rejected the increase, retaining the 18% rate. With no finalized budget agreement for the fiscal year that began July 1, the existing tax rate remains in place for now.
Other legislative discussions have included House Bill 14, introduced in January, which would allow bettors to deduct gambling losses from their taxable winnings. Currently, all gambling winnings in North Carolina are taxed at a flat 4.5% income tax rate, with no option to offset gains with losses. The bill has yet to advance beyond the Finance Committee but could gain traction following recent developments on the federal level concerning gambling tax deductions.
Meanwhile, House Bill 828 sought to ban proposition bets involving college athletes and restrict on-site betting for collegiate events during an eight-hour window before and during games. Like the previous year’s similar effort, the bill remains stalled in committee since April.
Revenue Distribution and Athletic Funding Debates Continue
Revenue from sports betting in North Carolina is being allocated to several public interests. These include athletic departments at 13 schools in the University of North Carolina System—excluding UNC-Chapel Hill and NC State—alongside funding for youth sports organizations, a tourism initiative designed to attract major events, gambling addiction treatment through the Department of Health and Human Services, and contributions to the general fund.
To date, each of the 13 athletic departments has received over $2.5 million from the sports betting tax revenue. As of July 1, these schools are expected to collectively distribute up to $20.5 million to student-athletes, prompting further conversations about funding expansion.
Both chambers’ current budget proposals include plans to incorporate UNC and NC State into the revenue distribution formula, though the Senate version would provide those schools with significantly more funding.
“Hopefully we’re going to get some of the gambling money,” said Bubba Cunningham, athletics director for the University of North Carolina.
North Carolina’s rapid ascent in the sports betting space has both impressed stakeholders and ignited a series of policy debates. As the state’s betting industry matures, decisions on taxation and distribution will likely shape its future pace and direction.
Source:
‘’North Carolina sports betting revenue, taxes running years ahead of expectations’’, wral.com, July 08, 2025.
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