North Carolina Set to Raise Sports Betting Tax Rate as Lawmakers Reach Budget Agreement

North Carolina sports bettors and the operators serving them are watching closely as state lawmakers have reached a tentative agreement to raise the sports betting tax rate, according to people with knowledge of the budget negotiations. The state currently levies an 18 percent tax on gross wagering revenue from its eight licensed online sportsbook operators, but legislators are now targeting a higher rate as they finalize the state’s spending plan.

The development comes after North Carolina’s legal sports betting market has significantly outperformed revenue expectations since its March 2024 launch. The state has collected more than $287 million in sports betting tax revenue over that period, giving lawmakers confidence that higher rates are achievable without dramatically shrinking the market.

Where the Negotiations Stand

Sources familiar with the talks told WRAL News that discussions have centered on a rate in the 20 to 30 percent range, with a tentative agreement reached at the lower end of that window. House budget writer Donny Lambeth confirmed the chambers had agreed on a rate increase but would not specify the exact figure.

The two chambers entered negotiations from very different starting points. Last year, the Senate passed a budget calling for a 36 percent tax rate on sports betting operators, while the House kept it at 18 percent. The current agreement appears to represent a compromise, though the final number could still shift before a budget passes.

For context, North Carolina’s current 18 percent rate is relatively moderate compared to markets like New York, which taxes sportsbooks at 51 percent, and Illinois, which implemented a tiered structure reaching 40 percent for high-volume operators. Tennessee operates at 20 percent. A North Carolina rate landing near 20 percent would keep the market competitive, though anything approaching 30 percent would put real pressure on operators’ margins.

What This Means for Bettors

When sports betting tax rates increase, bettors often feel the effects indirectly. Operators facing higher tax bills may respond by reducing promotional offers, adjusting odds margins, or scaling back bonuses. The eight legal sportsbooks currently operating in North Carolina sports betting include FanDuel, DraftKings, BetMGM, Caesars, Fanatics, and several others.

Those platforms have invested heavily in the North Carolina market, which benefits from strong sports fandom across professional and college sports. The Carolina Hurricanes’ run to the Stanley Cup Final has generated significant betting activity this spring, and the upcoming FIFA World Cup, which includes games hosted in several US cities, is expected to drive a major surge in wagering through the summer.

Industry groups representing sportsbook operators are expected to push back against any rate that approaches the upper end of the discussed range. The final outcome will depend on how much leverage operators have in budget negotiations compared to legislators’ appetite for new revenue. The clock is ticking, as North Carolina’s budget process has historically stretched well beyond the fiscal year start date.