North Carolina House, Senate Disagree on Sports Betting Tax Rate

• The North Carolina House of Representatives yesterday introduced its fiscal year budget
• The House is advocating for the state sports betting tax rate to remain at 18%
• The North Carolina Senate introduced a budget that included a 36% sports betting tax rate in its budget

North Carolina lawmakers seem to disagree on the state’s sports betting tax rate.

The North Carolina House of Representatives yesterday introduced their version of the state’s $66 billion two-year budget. The House is not advocating for a change in the state’s sports betting tax rate, despite a proposal in the Senate’s budget to increase the rate to 36%.

It’s unlikely that either the House or Senate will agree on each others budget proposals and will likely require a conference committee to work through their differences.

House Calls for Sports Betting Allocation Changes

While the House of Representatives did not include an increase to the North Carolina sports betting tax rate, it did include amendments to how sports betting tax revenues are allocated to North Carolina colleges.

Under the proposal, the University of North Carolina and North Carolina State will be eligible to receive funding from the state’s sports betting revenue pool. The current system only cuts in the 13 other UNC schools that participate in NCAA sports.

The House proposal calls for the following changes to its sports betting revenue allocations

• $300,000 to each public university where the majority of its athletic teams compete in DII
• $1 million to each public university competes in DI and the men’s football programs do not compete in the DI Football subdivision
• $3 million annually to the North Carolina Youth Outdoor Engagement Commission for grants
• $10 million annually to the North Carolina Major Events, Games, and Attractions Fund

Of the remaining sports betting revenues, 70% will be distributed among public universities to support collegiate athletic departments. Of this revenue pool, it will be allocated as such:

• 20% to be distributed equally among public universities
• 50% annually to be distributed to public universities in which the men’s football programs compete in the DI football subdivision of the NCAA
• The remaining funding will be deposited into the general fund

Senate Sports Betting Tax Rate Still Considered

Members of the Senate introduced their two-year, more than $65 billion state budget in April. The proposed budget includes a 100% increase to the North Carolina sports betting tax rate.

If approved, North Carolina’s new rate will increase from 18% to 36% of gross wagering revenue for sports betting operators.

If the new 36% tax rate is approved, it will go into effect for all licensed North Carolina sports betting operators on Oct. 1, 2025. The new rate will potentially put North Carolina near the top of the list for state sports betting tax rates. New York, New Hampshire, and Rhode Island feature the highest sports betting tax rates in the county at 51%, with Delaware next at 50%.

Illinois features a tiered sports betting tax rate that tops out at 40%. North Carolina would be aligned with Pennsylvania, which also taxes sports betting at a 36% rate.

North Carolina launched sports betting in March 2024. Through its first 13 months of operation, the state has reported $751,975,244 in gross sports betting revenue. This has resulted in more than $135.35 million in total sports betting tax revenue for the Tar Heel State.

If the tax rate is increased to 36%, the state would have taken in more than $270.7 million in sports betting tax revenue during the same time period.