North Carolina is following the lead of other states. Tar Heel state legislators are looking to raise taxes on the state’s sportsbooks.
The Tar Heel State legalized sports wagering in 2023, and lawmakers are pushing to hike the tax rate from 18% of gross wagering revenue to between 20% and 30%, according to WRAL. The state has brought in more than $287 million in taxes since mobile betting launched in March 2024, surpassing initial projections.
Lawmakers’ initial rate increase agreement was closer to 20% than 30%. But that could change as politicians take budgetary considerations into account.
“It’s been a tremendously successful policy in this state,” House Speaker Destin Hall (R) told WRAL. “A lot of people apparently like to do that sort of thing for one reason or another. Got a lot of revenue to the state.
“I think, on our side of the building, it’s more so looking at, ‘How do we line up with other states?’ We want to be on the average of what other states are doing on a lot of these rates. A lot of the ideas are out there. I think we’re somewhat hesitant to tweak too much a program that’s worked pretty well for the state all things considered.”
Operators Fight Against Hike
Sports betting operators are generally opposed to increased taxes. They argue that increased costs make operating profitably more difficult, especially when faced with new competition from prediction markets.
“This tax hike will only penalize licensed, regulated companies who have delivered hundreds of millions in tax revenue to the state and the UNC System athletic departments,” a spokesperson for the Sports Betting Alliance said.
“We urge state leaders to instead focus on strengthening the legal framework that protects players, supports jobs, and keeps illegal and unregulated operators out of North Carolina.”
How Do New Rates Compare To Elsewhere?
If North Carolina raises the levy on the low end of the 20-20% range, the state would fall somewhere in the middle of the pack, according to a study from the U.S. Tax Foundation Tax Foundation. By comparison, New York, New Hampshire, Rhode Island, and Oregon have the highest rates at 51%.
Illinois puts the heaviest burden on sportsbook operators. In 2025, the state added a 25-cent per-bet tax on the first 20 million wagers
a sportsbook accepts. For any bet beyond the 20 million threshold, the per-bet tax doubled to 50 cents per-bet. The unique tax followed a rate hike in 2024 that instituted a progressive tax structure on operators with the highest bracket paying 40%.
Lawmakers are now considering a repeal of the per-tax wager after a significant drop in betting. These tax hikes also came as the city of Chicago imposed a 10.25% tax on sports betting in the 2026 budget to help shore up an expected $1.2 billion deficit.
On the other end of the spectrum, Nevada has the lowest tax rate at 6.75%. The same rate applies to all forms of gambling revenue. Iowa has matched Nevada’s rate to tie as the lowest tax rate on the industry.
States with tax rates also in the single digits include Michigan (8.4%) and Indiana (9.5%). Several states collect 10% of revenue, including Arizona, Colorado, Wyoming, Kansas, West Virginia, and Maine.
Other states have also moved to raise rates over the last couple years. In May, Michigan Gov. Gretchen Whitmer (D) pushed lawmakers to enact a per-wager levy similar to those found in Illinois.
A bill was filed in January that would see that state’s rate rise from from 20% to 51%. Lawmakers in New Jersey, Maryland, Ohio and Mississippi have also advocated for tax hikes.
