North Carolina Moves Sportsbook Tax to 23%
North Carolina lawmakers have agreed to raise the online sportsbook tax by five percentage points, from 18% to 23%. The resulting rate will take effect starting from the beginning of the next fiscal year in July.
The final number is below some initial suggestions. Lawmakers were considering various possibilities between 20% and 30%. Previous ideas went further, with options like 36% and even 50% being discussed.
Budget Talks End at 23%
State Sen. Jim Burgin confirmed the 23% figure after weeks of discussions over the budget. This decision gives the state a larger share of sportsbook gross wagering revenue.
Moreover, this means that North Carolina becomes ahead of several mid-range U.S. markets. New Jersey has a tax rate of 19.75% for online sports betting. Massachusetts and Ohio have a tax rate of 20%. North Carolina would be above that pack but still below the rate of 36% in Pennsylvania.
Sports Betting Becomes a Budget Tool
The tax hike comes after impressive early results from North Carolina’s regulated market. Since the market inception, online sports betting has generated more than $1.6 billion in operator gross wagering revenue. The state has received close to $300 million in taxes from the 18% rate.
Through the 2025/26 fiscal year to date, sportsbook taxes brought in $133 million. Given a 23% rate, the total would be closer to $170 million. This means that the hike could have added about $37 million in extra revenue.
This is the reason why lawmakers were very careful, rather than imposing a more drastic increase. North Carolina’s market has delivered revenue ahead of projections. The hike gives the state additional income without altering the economic nature of the market.
House Speaker Destin Hall once said that lawmakers were comparing North Carolina to other states. He further noted that legislators were cautious with changes to a successful program.
Operators Warn of Weaker Offers
Sportsbook operators and organizations were against the increase. It is quite easy to understand why: the increase in taxes may decrease the value operators can offer to their customers.
The Sports Betting Alliance encouraged residents to oppose the new rate. Operators noted that a higher tax burden may result in fewer offers, lower bonuses, or unfavorable terms of operation.
FanDuel also informed its customers about the fact that legalized sports betting contributes to financing college athletics in the state. It said that an increased tax may jeopardize this process.
Another issue is the offshore market. In case operators are not offering enough incentives, some bettors may consider using their services. That would work against one of the main goals of legalization: keeping betting inside the licensed and taxed market.
Expert View
North Carolina’s 23% rate looks like a compromise rather than a hard reset. The state is taking a larger share, but it has avoided the kind of 50% model that can limit operator flexibility.
The real test will come after July 1. If sportsbooks cut promotions sharply, lawmakers may collect more tax per dollar but risk slowing regulated-market growth. If operators absorb the increase, North Carolina will have turned a young betting market into a stronger budget line without causing immediate disruption.