North Carolina Lawmakers Agree on Sports Betting Tax Increase to 20-30 Percent Range
North Carolina lawmakers have reportedly agreed to raise the state’s sports betting tax rate as part of the upcoming budget. According to a WRAL report, legislators settled on an increase from the current 18 percent to somewhere in the 20 percent to 30 percent range on gross gaming revenue, with the final figure likely at the lower end.
This marks the second consecutive year North Carolina has considered hiking the tax. The move comes as the state evaluates additional revenue options while balancing pushback from operators. As someone who has spent decades observing the evolution of gaming regulation, I see this as another inflection point where tax policy collides with market realities.
Agreement Reached but Subject to Change
The WRAL report indicates an agreement is in place to raise the tax rate on gross gaming revenues to the lower end of the 20 percent to 30 percent range. Legislators could still amend the increase if sports betting operators and the state’s eight licensed online sports betting operators continue to apply pressure.
North Carolina began considering the tax increase last month. The state’s licensed operators have already contributed nearly $133.06 million in tax revenues during fiscal year 2026, according to the North Carolina State Lottery Commission.
This year’s discussions follow a similar debate in 2025. Then, the North Carolina Senate proposed raising the rate to 36 percent, but the House did not support it and the hike was dropped from the final budget.
Operator pushback remains a live variable.
Lessons from Last Year’s Negotiations
Last year’s budget process revealed clear divisions. Senate members pushed for a 36 percent rate while the House held the line at 18 percent. The final document left the rate unchanged.
The current proposal sits between those poles. A rate at the lower end of 20 percent to 30 percent would still represent a noticeable jump from the existing 18 percent.
The eight licensed operators now face renewed uncertainty. Their $133.06 million contribution this fiscal year demonstrates meaningful revenue generation for the state even at the current rate.
How much more the state believes it can extract without slowing growth will define the outcome.
Risk of Per-Bet Fee Still Lingers
WRAL’s earlier coverage raised the possibility of a per-bet fee for licensed operators. The latest budget update did not address whether that option remains under consideration.
Illinois stands as the only state with such a model. Gov. JB Pritzker (D) approved a budget in June 2025 that introduced the fee, effective July 1, 2025. It generated more than $5.2 million in its first month.
The Illinois structure charges $0.25 on the first 20,000,000 online sports bets each year, rising to $0.50 per bet thereafter. Operators responded by passing costs to customers and in some cases raising minimum bet amounts.
DraftKings, FanDuel, and Caesars Sportsbook began charging fees of $0.25 or $0.50 per bet. Other operators including Fanatics Sportsbook, BetMGM, Hard Rock Bet, and BetRivers followed with similar adjustments or higher minimum wagers.
North Carolina lawmakers have a chance to observe the Illinois experience before deciding. A per-bet fee on top of a higher tax rate would compound pressure on operators and could accelerate customer-facing charges.
Strategic Implications for Operators and Other States
A tax increase in this range would test how operators manage cost pass-through. Many already adjusted pricing and promotions in Illinois. Similar moves in North Carolina could reduce player value or slow acquisition.
The eight licensed operators hold meaningful leverage through continued engagement with legislators. Their pushback contributed to last year’s decision to maintain the 18 percent rate. Sustained advocacy may still influence the final number.
This development also carries precedent risk. Other states monitoring North Carolina’s process may view a successful hike as validation for reviewing their own rates. What begins as one state’s budget adjustment can ripple into broader industry planning.
The competitive dynamics shift when tax policy outpaces revenue growth.
The Bottom Line
North Carolina’s move toward a 20 percent to 30 percent sports betting tax rate, likely at the lower end, reflects ongoing pressure to generate revenue from a maturing market. With nearly $133.06 million already collected this fiscal year at 18 percent, the state is signaling it wants more. Yet the Illinois per-bet fee example shows that aggressive structures can prompt operators to adjust customer terms, potentially dampening engagement. Operators should treat this as a planning input and intensify dialogue with lawmakers. The final rate and any additional fees will set a data point for other jurisdictions still calibrating their approach to sports betting taxation. What happens next in Raleigh merits close attention from client-partners across the industry.
