North Carolina proposes doubling sports betting tax to 36%
North Carolina Senate Republicans have just rolled out their $66 billion biennial budget—and it proposes doubling the state’s sports betting tax to 36 percent. If the proposal passes, it will place North Carolina in the third place for the highest tax rates in United States (US) sports betting markets.
State among top 10 in monthly betting handle
The state entered the sports betting arena in March 2024, emerging as one of the top 10 states in terms of monthly betting handle. For the month of March, the state accepted $685 million in bets—an all-time high for the state. North Carolina’s digital sports betting market saw wagers reach $6.6 billion in its first 12 months, according to the North Carolina State Lottery Commission. The commission’s anniversary report highlighted key financial figures and how the industry has performed compared to other states.
Operators collected $713 million in gross gaming revenue (GGR), while the state earned $128 million in tax revenue, applying an 18 percent tax on GGR. These figures reflect the growing popularity of digital betting in North Carolina and its significant economic contribution. It does not include licence fees paid to the state.
For comparison, Ohio with a population of 11.8 million recorded a $7.4 billion handle and $911.4 million GGR in its first year. Michigan launched digital betting in 2021, reporting a $3.7 billion handle and $208.9 million GGR in first year. Michigan’s handle grew to $5.3 billion by 2024, showcasing continued expansion in the sector.
Effective 1 October, if passed
North Carolina does not allow sportsbooks to deduct promotional spending from their taxable revenue. Operators spent over $491 million on promos in year one. Senate Bill 257 is the vehicle driving this tax increase. If passed, it would double the tax rate from 18 percent, effective 1 October 2025. Republicans control both chambers of the General Assembly, which gives the bill momentum. However, Democratic Governor Josh Stein could veto the bill. While the GOP has a comfortable majority, they don’t have the three-fifths majority in the House needed to override a veto.
New York has the highest tax rate at 51 percent. The state has still spent a record $23.94 billion on betting during the 2024–25 fiscal year, according to data released by the New York State Gaming Commission. Illinois comes in next with 40 percent tax rates. If the bill is passed, it would put North Carolina ahead of Pennsylvania, which collects 34 percent of operator revenue at the state level.
