North Carolina House Rejects Tax Hike for Sports Betting Operators

A battle is brewing between the North Carolina House and Senate over a proposal to raise taxes on the sports betting industry.

The House has released its two-year budget proposal, which did not include a tax hike for sports betting operators. The proposal comes just days after the Senate released its own, which would double the current tax rate. Both chambers will review the proposals, likely leading to a conference to find a compromise.

The House budget proposal comes days after sports betting operators sent letters to lawmakers in both chambers warning against a tax hike. The letters stated that sportsbooks would be forced to water down odds and limit promotions, which could hurt the state’s market and lead to less revenue despite a higher tax rate.

While the state had a very successful first year of sports betting, it is still a relatively new market. The excitement of the new market will eventually begin to wear off, and some lawmakers fear that the fallout from a tax hike would speed that process up. 

North Carolina’s sports betting market celebrated its first anniversary in March 2025.

UNC and NC State Likely to Receive Tax Revenue

One area in which both budget proposals agreed included how tax revenue from sports betting should be distributed. The Senate and House agree that the University of North Carolina and North Carolina State University should begin receiving industry tax revenue.

Currently, North Carolina funds 13 state colleges, but that doesn’t include UNC and NC State. When the state created its sports betting market, it believed the two largest schools wouldn’t need the revenue nearly as much as the others. This led them to cut both out, but it appears lawmakers have had a change of heart.

The question now is where the tax revenue for the two colleges would come from. The Senate would pay for it with a tax hike, but the House is instead looking to overhaul the entire distribution system. 

While the idea of a tax hike will face fierce opposition, changes to how tax revenue is spent appear certain.