North Carolina's Sports Betting Tax Rate Is Up for Debate
More and more U.S. states are revisiting their sports betting tax rates in 2026, and North Carolina lawmakers reportedly are about to jump on the bandwagon.
The Tar Heel State was relatively late to the sports betting legalization frenzy, with the first mobile bets being placed in March of 2024.
Tribal casinos used to be the only sports betting options
Prior to that, the only sports betting options were at sportsbooks at the state’s tribal casinos. The Eastern Band of Cherokee Indians launched their sports betting operations at their Cherokee and Murphy casinos in 2021, followed by the Catawba Indian Nation doing the same at their Kings Mountain casino the following year.
The Cherokee and Murphy locations are three and four hours, respectively, west of Charlotte, which is the state's largest city. None of North Carolina's 10 largest cities are within what could be described as a "reasonable day" trip to one of those casinos and back.
The Kings Mountain location, which opened in September 2022, is less than an hour or so from Charlotte, so that undoubtedly produced more citizen awareness of the gambling option.
The introduction of mobile sports betting in 2024 vastly improved the tax revenue scenario in North Carolina.
In 2025, residents and visitors wagered $7.3 billion online, leading to $734.5 million in sportsbook gaming revenue at a relatively typical 18% sports betting rate.
The NC debate on raising its sports betting tax rate
The last of the countless billions of dollars of federal government assistance to states in the wake of the 2020-2021 COVID-19 pandemic mostly have been spent, which has led to one state after another seeking ways to add new tax revenue without universal tax hikes that are seen as potential poison to lawmakers who seek to remain in office.
The (at least partial) solution for many legislators is to revisit the sports betting tax rate, since a significant portion of voters would not be at all affected because they do not gamble.
The challenge, of course, is how much the tax rate can be raised before it causes repercussions such as sportsbooks exiting the state or residents switching over to the lucrative illegal, offshore, unregulated competitors.
Published reports have suggested that a complete doubling of the tax rate to 36% was on the negotiating table, but it now appears that a more modest increase is more likely.
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“It’s been a tremendously successful policy in this state,” House Speaker Destin Hall told WRALNews.com. “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.”
A tax on each individual sports bet, as Illinois regulators have imposed, was discussed but apparently discarded as too severe.
Opposition to an increase in tax rates
The Sports Betting Alliance - which represents several major sportsbook operators - issued a statement opposing a change in the tax rate.
"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. 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."
The annual fiscal year budget is due on July 1, and sports betting projected revenue is part of that overall calculus.
What's next in the Tar Heel State? – a new casino development
The Catawba Nation's casino opened as a temporary facility in 2021, with the first phase of the permanent location as "Two Kings Casino Resort" having opened in May 2026.
Upon completion in 2027, the 2.2 million square foot site will include an enlarged casino as well as a number of dining options, an entertainment center, and a parking garage. The presence of a sportsbook will only enhance appeal to Charlotte-area residents either making a day trip or a long weekend out of visiting.
Next-door neighbor Virginia features casinos in Bristol and Danville, and that may encourage North Carolina lawmakers to no longer oversee one of the largest U.S. states that does not have commercial casinos.
A Meredith College poll taken in February 2025 showed that residents offered a 58% approval of the concept of adding more casinos, with only 32% opposed. The issue remains a hot-button topic among lawmakers, however, so it is unclear if casino expansion will soon be in the cards in North Carolina.
