TLDR Governor Josh Stein signed North Carolina’s $34 billion state budget into law on July 8, 2026. Sports betting operators will now pay a 23% tax on revenue, up from 18%. The budget adds a new 6% tax on prediction market operators such as Kalshi and Polymarket. Bettors can now deduct gambling losses on state taxes, retroactive to January 1, 2025. The new rules take effect January 1, 2027, and could lead to legal disputes over state versus federal authority.
Governor Josh Stein has signed North Carolina’s $34 billion state budget into law. The budget brings several changes to how gambling is taxed in the state.
Sports betting operators will now pay a tax rate of 23% on their revenue. That is up from the previous rate of 18%. It marks the first increase since legal sports betting began in the state in March 2024.
The budget also creates a new tax for prediction market operators. Companies like Kalshi and Polymarket will now pay a 6% tax on their net trading revenue in North Carolina.
What Changes for Bettors
Bettors in North Carolina will get one piece of good news. They can now deduct gambling losses when filing state taxes.
This deduction applies retroactively to January 1, 2025. That means people can claim losses from the past year and a half.
North Carolina had been one of the few states that did not allow this kind of deduction. Bettors were taxed on their full winnings, even if they lost money overall.
Sportsbooks also face a new reporting rule. They must send tax forms to any customer who wins $2,000 or more with a single operator in a year.
Prediction Markets Face New Tax Without New Rules
The budget does not create a licensing or regulatory system for