Newest Reported North Carolina Budget Includes Sports Betting Tax Increase, Gambling Loss Deductions

• A WRAL News report shows the latest North Carolina budget proposal includes a 23% sports betting tax rate and the allowance of gambling deductions
• Under the latest budget proposal, UNC and NC State will also receive revenue from sports betting
• This is the second budget session in a row legislators have considered an increase to the state’s currently 18% sports betting tax rate

North Carolina lawmakers are still considering the state’s next budget and two universities may see a cut of sports betting tax revenues if the latest iteration of the budget is passed.

Brian Murphy of WRAL News reported North Carolina lawmakers have included an increase of the state’s sports betting tax rate to 23% of gross gaming revenues, an allowance for state gamblers to deduct losses, and for UNC and NC State to receive a portion of sports betting tax revenues in the newest considered budget proposal.

Under the latest budget proposal, gamblers could also deduct losses against their winnings on state income taxes.

Changes to Sports Betting Landscape

The newest form of the North Carolina budget, if approved, will see an increase of the state’s sports betting tax rate from 18% to 23%.

During 2025 budget negotiations, North Carolina Senate members included an increase to the state’s sports betting tax rate to 36% in their approved budget, up from its current rate of 18%. The House of Representatives, however, did not advocate for an increase and it was ultimately not included in the state’s finalized budget document.

North Carolina currently has eight licensed online sports betting operators who pay an 18% tax rate on gross sports betting revenue. So far in fiscal year 2026, the licensed sports betting operators have contributed more than $133 million in tax revenues to North Carolina, according to the North Carolina State Lottery Commission.

If the tax rate is increased to 23%, the state would have taken in more than $170 million in tax revenues during the same period.

According to the WRAL report, UNC and NC State would also begin to see portions of the state’s sports betting tax revenues. Currently, the state’s 13 other UNC schools receive sports betting tax revenue dollars, but UNC and NC State do not. Under the newest budget proposal, the two largest UNC schools would be eligible to receive sports betting tax revenues beginning July 1, 2027.

Gambling Loss Deductions

According to WRAL, the newest budget proposal also includes an allowance for North Carolina gamblers to deduct losses against winnings on state income taxes. Currently, North Carolina gamblers have to pay taxes on their winnings during the year no matter their losses. This means, if a gambler wins $15,000 in bets on the year, but also loses $16,000 in bets on the year, they still are responsible for paying income taxes on the $15,000 won, despite losing $1,000 overall in bets on the year.

Up until last year, the federal government allowed gamblers to deduct losses on their taxes. President Donald J. Trump’s (R) One Big Beautiful Bill Act was signed into law in July 2025, which included a change to the Internal Revenue Code that only allows professional gamblers to deduct 90% of their losses in a year, down from 100%.

This will also potentially help offset a new bill passed by the North Carolina legislature requiring licensed sports betting operators report any users who win more than $2,000 in a year to the Department of Revenue to be taxed. It would allow users to deduct losses as well.