North Carolina Discusses Doubling Sports Betting Tax, Joins National Trend of Hikes on Operators
Lawmakers in North Carolina have discussed increasing the sports betting tax, following a recent trend around the United States. No formal legislation has been proposed in North Carolina yet, but it signals another example of U.S. states seeking additional revenue from sportsbook operators.
- North Carolina Wants to Double Its Sports Betting Tax
- North Carolina Makes its Move
- National Trend: Recent & Proposed Tax Hikes
- Sports Betting Tax Increases: States Leading the Charge
- States with Proposals to Increase Sports Betting Tax
- Impacts on Operators, Consumers
- Long-Term Considerations for U.S. Lawmakers
North Carolina Wants to Double Its Sports Betting Tax
North Carolina isn’t looking just to increase the current sports betting tax; they are looking to double it, from 18% to 36%. For reference, a 36% sports betting tax on gross wagering revenue (GWR) would put them in a tie for seventh-highest in the country.
The double-up increase would also put North Carolina at the upper end of Illinois’ tiered tax structure, which caps out at 40%, making the Land of Lincoln the sixth-highest. If you have been following the news about Illinois’ recent increases, it’s fair to wonder whether operators in North Carolina might pull a similar move and close select retail locations.
Luckily, none of these taxes have hit customers yet, but the Illinois situation shows there is precedent for concern about the future. At some point, sportsbook operators will have to decide whether to continue doing business in certain jurisdictions.
North Carolina Makes its Move
In the latest round of North Carolina budget negotiations, the Senate approved a proposal to double the 18% sports betting tax to 36%, but the House was not in favor of this. In fact, there are many potential roadblocks to Senate Bill 257 (SB 257) becoming law.
Of course, the gambling industry understands what a detrimental blow this could be. With the number of states already moving to increase the tax rate, it feels like not “if,” but “when,” it comes around to another area of the country.
The largest sports betting operators are available in just about half the country. One, two, or three states with a high tax rate are unfortunate. When that number rises to 10, then 15, then 20 states with high tax rates, the joy of owning a company in this industry starts to dissipate.
National Trend: Recent & Proposed Tax Hikes
In March 2024, sports betting launched in North Carolina, bringing in $287 million in tax revenue to date. It’s no secret that every U.S. state claims it is in debt, and going after sportsbook operators has been one of the more frequently traveled roads.
The asks from sportsbooks in numerous states are far more popular than coming after the citizens’ income and property taxes, which have happened before. Mobile sports betting is still relatively new, at least in North Carolina, so this feels like an untapped resource up to this point.
Eventually, the well will run dry here, just as it does in other places. As they say, you’ve got to strike while the iron is hot, and we’re seeing the sportsbook operators become victims in this sense. It’s not the first time a state has tried this, and it will certainly not be the last.
Sports Betting Tax Increases: States Leading the Charge
Illinois
Illinois sportsbooks fall within what has been one of (if not the) most ruthless states, which has been imposing a graduated tax rate between 20% and 40%, with the bigger names in the industry typically hitting the latter end of that range based on betting handle volume. In addition, a per-bet fee (starting at $0.25 and escalating to $0.50 after 20 million wagers per operator) is imposed on both sportsbook operators and customers.
Louisiana
Starting on August 1, 2025, Louisiana increased its online sports betting tax, going from from 15% to 21.5%. The tax applies only to online wagers, while the retail tax rate of 10% remained the same. The original proposal had Louisiana looking to raise its online sports betting tax to 32.5%, but it was amended during committee negotiations.
Maryland
As for Maryland sportsbooks, the state raised its online sports betting tax from 15% to 20%, effective June 1, 2025. As in Louisiana, the tax applied only to online bets, while retail remained at 15%. Also, like Louisiana, Maryland was looking to raise the online sports betting tax rate to 30% in some versions of the proposal.
New Jersey
New Jersey increased its sports betting tax from 13%, which it had maintained from 2018 until 2025, to 19.75%. With the Garden State playing host to 2026 World Cup matches (including the final), state lawmakers decided to take advantage by proposing an additional 10% tax on all World Cup bets placed at sportsbooks within New Jersey state lines, regardless of where the game is being played. No outcome has been decided yet on that bill, but the world’s biggest tournament is now less than a month away.
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States with Proposals to Increase Sports Betting Tax
There have been various proposals across multiple U.S. states directed at increasing state taxes. For example, Massachusetts Senator John F. Keenan has been very aggressive, notably with Amendment 828 and Senate Bill 302 (SB 302), in looking to increase the current online sports betting tax for Massachusetts sportsbooks from 20% to 51%. SB 302 is still alive in the Senate and would also ban live betting, but it is not popular with people in the industry.
Another hot example would be the latest proposal for Ohio sportsbooks' taxes. After already increasing the sports betting tax from 10% to 20% in 2023, Ohio Gov. Mike DeWine gave it another go, doubling it to 40%. Ohio is already one of the most-participated-in sports betting states, having generated around $209 million in taxes in 2025.
These aren't the only states though looking to capitalize on sports betting taxes. There has been a proposal that pushed for more moderate increases of 10% on both sports betting and iGaming taxes. Another has taken a more aggressive attack, suggesting to take the state's flat 10% tax rate all the way up to 45% for “large operators, which has obviously drawn plenty of criticism nationwide. And yet another state proposed systems similar to that of Illinois', calling for a $ 0.25-per-wager tax that would increase to $0.50 after 20 million wagers per operator, not to mention an iGaming tax rate to 36%, up from 8.4%. As anyone could imagine, the operators were not happy and strongly opposed.
Impacts on Operators, Consumers
Sports betting operators and groups like the Sports Betting Alliance have made strong pushbacks against these tax increases. These groups have argued that higher taxes will eventually be passed on to customers through reduced promotions, bonuses, and less favorable odds.
All of these negative factors could result in customers fleeing the licensed operation for the black-market ones.
Recently, I have covered news on sweepstakes casinos (and sportsbooks), and the parallel of the crackdowns on those operators seems to make a lot more sense now. If the sweepstakes operators are out of business, it leaves customers with yet another absence of replacement. In fact, people may just stop betting altogether if these costs start coming back their way.
Long-Term Considerations for U.S. Lawmakers
That last sentence from the paragraph above really struck me. Is it possible that people would really stop betting if the costs became so exorbitant?
I think of myself in this position because I love betting on sports and wonder just how bad it would have to get for me to say I’m finally done. Perhaps the Illinois situation is the one thing we can all look at as being possible. After all, precedent is letting you know that something is possible, considering it has already happened in another instance.
For North Carolina, a massive increase in sports betting tax revenue is yet another sign that taxes are a part of our time.
I have a theory: if you see a celebrity in a ton of commercials all of a sudden (a la Kevin Hart, Jon Hamm, Zoe Saldaña), that celebrity is most likely in debt. We can apply the same logic here to U.S. states looking to increase taxes, not just in a single field.
In fact, the strategy behind taxing sports betting operators is carefully calculated, given that sports betting is still relatively new to most states, including North Carolina.
At some point, though, U.S. lawmakers will have to walk a fine line between generating revenue and not pushing away too many sportsbook operators and customers.
