The legal online sports betting market of North Carolina went live in March 2024. Licensed operators currently pay an 18% tax on gross wagering revenue. The tax rate may be increased from 18% to somewhere between 20% and 30%, according to local reporting.
Budget Pressure Reaches Sportsbooks
The discussions come as part of a broader debate over state budgets. Lawmakers are considering pay raises for teachers and state workers against the backdrop of the state’s phased tax cuts. Sports betting provides a revenue stream that is more politically defensible than raising taxes.
The amounts are substantial enough to make the idea viable. More than $287 million in tax receipts have been collected by the state since the market launch. An additional $11.6 million was reported in just the month of April 2026. As per WRAL, a 30% rate from the start of legalization could have produced almost $200 million in additional tax revenue.
Tax Hikes Spread Across States
North Carolina is not acting alone. Several states that legalized mobile sports betting after the overturning of PASPA now have mature enough markets to reconsider what they collect from operators.
For example, Illinois has already gone beyond the ordinary revenue tax scheme by imposing per-bet charges. New Jersey increased its taxes on online sports betting and iGaming to 19.75%. Maryland and Louisiana both increased their taxes on online sports betting in 2025. Massachusetts introduced a Senate Bill 302 to increase the tax on online sports betting from 20% to 51%.
Politically speaking, increasing sportsbook taxes is one way to fill state budgets without impacting personal income taxes or property taxes. Commercially speaking, this may have consequences for operators that may respond differently – with fewer promotions, weaker odds, higher user fees, or smaller retail footprints.
Prediction Markets Add Another Route
The tax debate now has a new variable. Event-based contract platforms like Kalshi are described as federally regulated markets rather than state-licensed sportsbooks. Similarly, FanDuel has moved into the prediction-market lane with its FanDuel Predicts platform, with contracts being listed by CME Group derivatives exchanges and regulated by the CFTC.
It becomes an issue for state lawmakers. Traditional sportsbooks pay state license fees and state taxes on sports betting revenue. Prediction markets operate in a different regulatory framework altogether. With sportsbook costs rising, operators may have more reason to test products that sit outside state sportsbook GGR tax systems.
What Comes Next
North Carolina has not approved a higher rate yet. The range under discussion still looks moderate compared with New York-style 51% models. Even so, the debate shows how quickly states now treat sports betting as a budget tool rather than a growth industry.
The risk for legislators is timing. A tax rise can lift revenue in the short term, especially in a healthy market. But if the rate pushes operators to cut value for users or shift attention toward prediction products, the state may protect today’s budget while weakening tomorrow’s taxable base.
