North Carolina Assessing Sports Betting Tax Increase

North Carolina lawmakers are discussing several options for a sports betting tax hike

According to reporting by Raleigh's WRAL, state lawmakers are weighing several potential options regarding a sports betting tax increase as they hold closed-door discussions on North Carolina's next state budget.

Currently, North Carolina's eight licensed sports betting sites pay 18% of gross revenue to the state in taxes. North Carolina launched legal and regulated sports betting in March 2024. The state has collected $287 million in taxes from sportsbooks operating in North Carolina.

“It’s been a tremendously successful policy in this state,” said North Carolina House Speaker Destin Hall, a Republican from Caldwell. “A lot of people apparently like to do that sort of thing for one reason or another. Got a lot of revenue to the state."

Speculation is that in discussions of the potential state budget proposal, lawmakers are leaning toward the lower end of that 20-30% rate for the tax hike. A year ago, the State Senate put forth a budget proposal that would've doubled the sports betting tax rate from 18% to 36%. The measure was winning approval in the Senate Chamber. However, by the time the State House was passing the budget, the sports betting tax rate was returning to its original 18%.

 The state tax rate falls right in the middle on a national scale

Forty states are offering legal and regulated sports betting. At its current 18% rate, North Carolina's sports betting tax rate falls right in the middle of that group.

Looking at the neighboring states that offer sports betting, North Carolina is very comparable. Among that group, Tennessee is the high-water mark at 19.7%. Virginia ducks in under North Carolina at 15%.

That matters to the lawmakers who are weighing which way to go with the budget.

"I think, on our side of the building, it’s more so looking at, ‘How do we line up with other states?’" Hall said. "We want to be on the average of what other states are doing on a lot of these rates.

"A lot of the ideas are out there. I think we’re somewhat hesitant to tweak too much a program that’s worked pretty well for the state, all things considered.”

North Carolina sportsbooks are protesting the thought of a tax hike

The leading sportsbooks are speaking out against any sort of tax increase on their product. They are making this known through the lobby group, the Sports Betting Alliance. It represents leading sportsbooks like BetMGM, Bet365, DraftKings, FanDuel, and Fanatics.

"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,” the Sports Betting Alliance said in a statement to WRAL. “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."

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