North Carolina Sportsbooks Warn Lawmakers Against Tax Hike

The opposition to a proposed sports betting tax hike in the Tar Heel State has officially begun.

Sportsbook operators in North Carolina have sent letters to several lawmakers urging them to reject a Senate budget that proposes to double their tax rate. That would set the new rate at 36%.

The letters warn that a higher tax rate would lead to fewer promotions and less valuable odds offered to residents, fewer wagers placed, and less tax revenue paid to the state.

The tax hike proposal comes after the state surpassed all expectations in its first year with legal sports betting. The successful debut has led to over $130 million in tax revenue for the state. While those numbers were celebrated, some lawmakers believe that sportsbooks still aren’t paying their fair share.

While the Senate has approved the budget and tax hike, the House has yet to release its own budget. With sportsbooks stepping up the resistance, don’t be surprised if their proposal leaves the tax rate where it is.

Familiar Tactics Used by Operators

The warnings sportsbooks issued in their letters to North Carolina lawmakers echoed those used to prevent hikes in other states.

Many legislators around the country have been willing to call the sportsbooks’ bluff. Given how competitive the markets have been, they believe operators won’t unite to water down odds and limit promotions. We saw the alliance between sportsbook operators crumble in Illinois after the state proposed a tiered system where industry leaders would pay much higher rates than small operators.

The issue is with voters, especially those who are betting on sports. They are concerned that sportsbooks will deliver on these threats, leading to less money being won. North Carolina voters could start putting pressure on their local lawmakers, many of whom will be up for re-election in November 2026.

The vast majority of states that have attempted large tax hikes have failed under this pressure. Time will tell if North Carolina will soon join that ever-growing list.