North Carolina budget negotiators have agreed to raise the tax rate on online sports betting operators from 18% to 23%, state Sen. Jim Burgin confirmed this week, marking the first change to the rate since the market launched in March 2024.
The increase forms part of broader state budget negotiations tied to Gov. Josh Stein’s proposed $68 billion spending plan. Burgin, who said he had favored a 50% rate, noted that the Senate had previously proposed a 36% rate in last year’s budget cycle before the two chambers failed to reach agreement on a change.
Under the existing 18% rate, North Carolina’s licensed operators have generated more than $299 million in tax revenue since launch, drawn from $1.6 billion in gross wagering revenue, according to the North Carolina State Lottery Commission’s monthly sports wagering reports. The commission’s most recent report showed a handle of $561 million in May, the ninth consecutive month in which wagering exceeded $500 million. Total handle between January and May reached $3.2 billion, up from $3.0 billion over the same period in 2025.
Tax proceeds from sports wagering revenue are directed toward gambling addiction treatment and education, youth sports programs, the state’s Major Events, Games and Attractions Fund, athletic departments at 13 UNC System universities, and North Carolina’s general fund.
House Speaker Destin Hall, a Republican from Caldwell County, characterized the policy as a success for the state. The Sports Betting Alliance, an industry trade group representing licensed operators, opposed the increase, arguing it would penalize companies that have already contributed substantially to state and university revenue while risking reduced odds, fewer promotions, and a shift in bettor activity toward unregulated offshore platforms.
How North Carolina Compares to Other States
The new 23% rate places North Carolina above New Jersey’s 19.75% and Ohio’s and Massachusetts’ 20% rates, while remaining below Pennsylvania’s 36% and Illinois’ progressive structure, which ranges from 20% to 40% depending on operator revenue. New York, New Hampshire and Rhode Island currently apply the highest rates among states with legal mobile sports betting, each taxing operators at 51%.
The budget negotiations were ongoing at time of writing, with final passage expected ahead of the start of the state’s new fiscal year on July 1.