North Carolina Eyes Sports Betting Tax Hike as Budget Talks Intensify
North Carolina lawmakers have turned to gambling-related taxes in budget negotiations in Raleigh, with sports betting operators the clearest target for extra state revenue. According to WRAL, private talks cover a possible increase to the state’s current 18% tax on sportsbook gross wagering revenue and new levies on individual sports bets and lottery sales.
The proposals remain under discussion and no agreement has been reached. People familiar with the talks told WRAL that lawmakers have discussed sportsbook tax rates between 20% and 30% as Republicans try to finalize a budget that includes salary increases for teachers and state employees.
North Carolina’s eight licensed sportsbooks have paid more than $287m in taxes since legal sports betting launched in March 2024. Operators currently pay an 18% tax on gross wagering revenue, while lottery ticket sales and individual sports bets are not directly taxed. State lottery sales exceeded $6.58bn in 2025.
Budget pressure appears to drive the renewed debate. Governor Josh Stein’s proposed 2026-27 budget includes tax relief and public sector salary increases, while lawmakers continue to search for new funding sources.
According to figures cited in the negotiations, sportsbooks handled about $6.6bn in wagers during the 2025 fiscal year and generated roughly $647.7m in operator revenue. At the current 18% rate, sports betting taxes produced about $116.6m for the state. A 30% rate would have increased that figure to roughly $194m.
Industry opposition has already intensified despite the lack of a finalized proposal. The Sports Betting Alliance, which represents operators such as FanDuel, DraftKings, BetMGM, Fanatics and bet365, launched a campaign that urged bettors to pressure lawmakers against higher taxes.
The group said lawmakers in Raleigh are trying to raise taxes sharply on legal sports betting, hurting fans who follow the rules.
Operators argue that higher taxes would likely reduce promotional spend, worsen odds for bettors and increase pressure on legal operators that compete with offshore sportsbooks. The alliance also warned that extra costs could pass directly to consumers.
The debate mirrors last year’s failed budget talks. The North Carolina Senate previously proposed to double the sportsbook tax rate to 36%, while the House supported the existing 18% structure. Lawmakers failed to reach a compromise before the session ended.
North Carolina would still sit below several high-tax US betting markets if lawmakers settle near the upper end of current discussions. New York, Rhode Island, Delaware, Oregon and New Hampshire all impose sportsbook tax rates of 50% or higher.
Additional proposals that involve taxes on individual wagers or lottery purchases may face steeper political and operational hurdles. WRAL reported that lawmakers privately acknowledged those measures could prove hard to implement and unpopular with bettors.
TGJ Take
North Carolina’s discussions reflect a wider US pattern: once sports betting markets mature, lawmakers start to view operators as repeat budget tools rather than growth industries. For operators, the bigger concern is not a move from 18% to 30%, but how often states may revisit sportsbook taxes whenever fiscal pressure rises. Smaller operators and challenger brands will feel the squeeze first because they rely more on promotions and customer acquisition spend to compete with FanDuel and DraftKings. Affiliates focused on North Carolina should watch retention closely if sportsbooks cut bonus budgets to offset higher taxes.
