North Carolina Finalizes New Tax Hike For Online Sportsbooks

Things are about to get more expensive for online sportsbooks in North Carolina. 

Two weeks after announcing they had reached a deal, North Carolina lawmakers revealed that the tax rate for mobile operators will jump from 18% to 23%. It will be the first hike since the state’s market went live in 2024.

While sportsbooks won’t be happy about the change, the small hike still represents a victory. The state legislature has been considering a tax hike for over a year now, with proposals ranging from 36% to 50%. Those efforts were largely defeated by warnings from the sports betting industry, which told lawmakers that a large hike would shrink the market. 

“When states raise taxes, the costs get passed down to customers — directly hitting your wallet,” a Sports Betting Alliance statement reads. “It punishes NC sports fans who play by the rules and pushes more people toward illegal offshore sites with no consumer protections.”

Industry opposition led North Carolina lawmakers to lower their expectations. As a result, they agreed to negotiate a 20%-30% tax rate. Considering they reached an agreement at the lower end, it seems the industry has avoided a massive blow in the Tar Heel State.

Debate Over Tax Rate Likely to Continue

Lawmakers from both chambers of the North Carolina legislature agreed to a lower tax rate, but that doesn’t mean the debate is over.

Senator Jim Burgin has been a vocal supporter of the tax hike, but he is pushing for a rate closer to 50%. He isn’t alone in believing sportsbooks aren’t paying their fair share, and is unlikely to abandon the fight even after announcing the recent tax hike.

While lawmakers are unlikely to raise the rate again this year, there are other alternatives to boost tax revenue from sports betting. The state could follow Illinois' lead, which added a per-wager tax last summer. While it led sportsbooks to pass the cost on to bettors, the market’s revenue numbers remain strong.