TLDR North Carolina lawmakers are debating raising the state’s sports betting tax rate from 18% to between 20% and 30% to help plug budget gaps. The state has generated over $287 million in tax revenue since launching legal online sports betting in March 2024. Other states are also hiking taxes on sportsbooks, with Massachusetts pushing a bill to raise its rate from 20% to 51%. The Sports Betting Alliance is running campaigns warning that higher taxes will hurt bettors through worse odds and fewer promotions. Prediction markets like Kalshi are growing fast and operate outside state sportsbook tax structures, giving operators a potential alternative.
North Carolina lawmakers are in active talks to raise the state’s tax rate on sports betting revenue. The current rate sits at 18%, but budget negotiators are considering a new rate somewhere between 20% and 30%.
The state launched legal online sports betting in March 2024. Since then, it has brought in more than $287 million in tax revenue.
Analysts estimate the state would have collected an extra $200 million if a 30% rate had been in place from the start. That kind of number is hard for lawmakers to walk away from, especially with budget pressures mounting.
Last year, the North Carolina Senate approved a proposal to double the tax to 36%. The House blocked it, and the effort stalled.
This year, the push is back. Lawmakers need to fund teacher raises and state employee pay increases while also managing scheduled income tax cuts.
Other States Are Making Similar Moves
North Carolina is not alone in looking at sportsbook revenue as a way to fill budget holes. Several other states have recently raised or proposed raising their own tax rates.
Illinois introduced a progressive tax structure along with a per-bet fee. The