North Carolina Raises Sports Betting Tax to 23%, Among the Highest Rates in the Country

North Carolina lawmakers have agreed to raise the state’s online sports betting tax rate from 18 percent to 23 percent as part of ongoing state budget negotiations, according to multiple reports. If enacted, the new rate would position North Carolina among the highest-taxed sports betting markets in the United States and mark a significant change for an industry that launched in the state only 15 months ago.

State Sen. Jim Burgin confirmed the 23 percent figure to WRAL reporter Brian Murphy, noting that he had personally advocated for a much steeper rate of 50 percent before agreeing to the lower compromise figure. The tax increase is included in Gov. Josh Stein’s proposed $68 billion state budget, which faces a July 1 fiscal year deadline for passage.

How North Carolina Compares to Other States

At 23 percent of gross gaming revenue, North Carolina would surpass several of the country’s largest sports betting markets. New Jersey, one of the earliest states to legalize online wagering following the 2018 Supreme Court ruling in Murphy v. NCAA, taxes operators at 19.75 percent. Massachusetts and Ohio — both of which launched legal sports betting in the past several years — operate at 20 percent rates. Illinois recently moved to a tiered structure with rates ranging higher, and New York remains the outlier nationally at 51 percent, but among the broader group of mid-tier markets, a 23 percent rate stands out.

The rate increase comes less than two years after North Carolina launched its online sports betting market in March 2024. The state moved quickly after passing enabling legislation, and major operators including DraftKings, FanDuel, BetMGM, Caesars Sportsbook, and Fanatics Sportsbook all entered the market at launch, making North Carolina one of the more competitive new markets in the country from day one.

What the Tax Hike Means for Bettors

Industry groups have already flagged concern about the practical effects on bettors. When tax rates on gross gaming revenue increase, sportsbook operators typically respond in one of several ways: reducing promotional spending, narrowing odds margins, cutting back on the frequency of profit boosts and odds enhancements, or scaling back new-user welcome offers over time. None of those adjustments would shutter the North Carolina market, but they can quietly erode the value available to bettors on a day-to-day basis.

Sen. Burgin’s publicly stated preference for a 50 percent tax rate — nearly double what was ultimately agreed upon — reflects a broader tension visible in many state legislatures between maximizing tax revenue and sustaining a competitive legal market. Higher tax burdens, if set too aggressively, can push price-conscious bettors toward unlicensed offshore sportsbooks that offer better terms precisely because they operate outside the state tax structure. The 23 percent compromise is calibrated to generate additional state revenue while stopping well short of that market distortion threshold, though the real-world impact will only become clear once operators begin adjusting their North Carolina operations.

Bettors in the state would be well-served to monitor current promotional offers while they remain at their present levels. The North Carolina betting guide is updated regularly with the latest operator offers and market developments as the regulatory environment evolves.

Budget Context and Legislative Timeline

The sports betting tax hike is part of a broader $68 billion state budget proposal that Governor Stein’s administration is working to finalize before the July 1 deadline. Sports betting tax revenue represents a growing but relatively small component of the overall budget picture. However, it has become an increasingly reliable revenue stream that state legislatures across the country have moved to expand once markets are established.

North Carolina’s situation reflects a familiar pattern. Once a sports betting market is operational and operators have invested in licensing, marketing, and customer acquisition infrastructure, it becomes considerably easier for state lawmakers to raise the tax rate. Operators are unlikely to exit a functioning, profitable market over a moderate tax increase, which gives legislatures more leverage in subsequent budget cycles than they had during the initial legalization debates.

The specific impact on promotional offers and odds quality for North Carolina bettors will become clearer once operators formally adjust their North Carolina strategies. Bettors who want to secure current welcome deals should act before any changes take effect. You can review the latest offers via the DraftKings Promo Code and FanDuel Promo Code pages, which track current welcome deals from two of the state’s largest operators.

What Comes Next

The tax increase requires final approval as part of the broader budget package. If the budget clears the legislature before July 1, the 23 percent rate would take effect for North Carolina’s licensed operators. There has been no indication from any of the major operators currently active in the state that they plan to exit the market in response to the change.

North Carolina remains one of the newer legal sports betting jurisdictions in the country, and the competitive dynamics of the market are still developing. The 23 percent tax rate will be one of several factors shaping how aggressively operators invest in the market in the years ahead. For bettors, the most immediate takeaway is straightforward: the market stays open, but promotional conditions may tighten as operators adjust their long-term spending plans to account for the higher tax environment.