North Carolina Increases Online Sportsbook Tax Rate to 23%

North Carolina lawmakers have settled on a 5% increase in the tax rate applied to online sports betting operators, moving it from 18% to 23%.

The decision comes as wagering activity continues to exceed expectations, with bettors placing more than $561 million in May alone.

That marked the ninth straight month in which total bets topped half a billion dollars. Since legalization in March 2024, sports betting has generated more than $299 million in tax revenue off $1.6 billion in gross operator revenue. Had the higher rate been in place from the start, the state would have collected an additional $83 million, according to WRAL’s Brian Murphy.

A proposal to increase the rate to 50% was also considered, but lawmakers ultimately settled on 23%, marking the first rate increase since the market launched in 2024.

NC betting market continue to grow rapidly

The state lottery commission’s latest report shows betting activity has climbed steadily year over year. Between January and May of 2025, players wagered $3.0 billion; in the same period this year, the figure rose to $3.2 billion.

Since launch, North Carolina bettors have placed more than $15 billion in legal wagers. Lawmakers say the higher tax rate will help boost the state’s $32 billion budget, with funds directed to gambling addiction treatment, youth sports, the Major Events, Games and Attractions Fund, and athletics departments at 13 UNC System universities.

Money also flows into the general fund, which supports education, public safety, transportation, and health care.

House Speaker Destin Hall recently described the policy as a success, noting, “It’s been a tremendously successful policy in this state. A lot of people apparently like to do that sort of thing for one reason or another.”

Pushback from operators

While lawmakers see the increase as a way to strengthen state finances, operators have voiced concern.

The Sports Betting Alliance, which represents licensed companies, argued that the change punishes regulated firms that have already delivered hundreds of millions in tax revenue.

In a statement, the group said, “This tax hike will only penalize licensed, regulated companies who have delivered hundreds of millions in tax revenue to the state and the UNC System athletic departments. We urge state leaders to instead focus on strengthening the legal framework that protects players, supports jobs, and keeps illegal and unregulated operators out of North Carolina.”

FanDuel also warned that college sports might suffer under the new tax rates. “Legal sports betting is generating real revenue for collegiate athletic departments across the state,” it said to customers in an electronic letter. “A tax hike would threaten that funding and hit fans.

With the new 23% tax rate, North Carolina positions itself among states with higher sportsbook levies but still below the very top tier.

New York, New Hampshire, and Rhode Island share 51% of operator revenue with their states, while Delaware stands at 50%. Pennsylvania imposes a 36% rate, and Illinois uses a progressive system that ranges from 20% to 40%. North Carolina now sits above New Jersey at 19.75%, Massachusetts at 20%, and Ohio at 20%.

North Carolina Increases Online Sportsbook Tax Rate to 23%

NC betting market continue to grow rapidly

Pushback from operators

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