North Carolina Budget Contains Tax Hike on Sportsbook Operators

The Tar Heel State is looking to increase revenue from its growing sports betting market.

A group of North Carolina Republicans has introduced a two-year budget proposal into the Senate. Part of the proposal would double the sports betting operator tax rate to 36%. The tax hike comes after the state celebrated its first anniversary of a regulated sports betting market.

On top of raising the tax rate, the budget would also redistribute where the revenue from the sports betting industry will go. Most of the tax revenue is funneled into 13 UNC system schools. The list did not include the University of North Carolina and North Carolina State University. Still, the new budget would funnel 10% of the remaining tax revenue once the other 13 schools are paid out. 

The two schools would be required to play basketball against other UNC system teams in exchange for the tax revenue. This would help those schools gain national attention and sell more tickets.

The Senate’s Republican majority means the proposal should have strong support. However, it remains to be seen how the House will respond.

Proposal Will Face Fierce Resistance

North Carolina is the latest state to seek to raise its sports betting tax rate. However, very few have succeeded. 

The most significant opposition to tax rate hikes has come from sportsbooks. Their deep pockets mean they have allies at every level of government to help make their case. Operators have also gone directly to the public, sharing plans to water down odds and offer fewer bonuses. 

The campaign from sportsbooks has put too much pressure on lawmakers, leading to the vast majority of tax hike proposals failing.

The question now is how North Carolina is planning to handle the pushback. If they succeed, it could lead to a slew of similar proposals in other states.