Key Takeaways
- NC legislators approved an increase in the sports betting tax rate from 18% to 23% in June 2026
- Since March 2024 launch, the state has generated over $299 million in tax collections
- May 2026 saw more than $561 million in wagers — marking nine consecutive months exceeding $500 million
- Industry representatives criticized the increase, arguing it punishes compliant operators already contributing substantial revenue
- The new rate positions NC above states like New Jersey and Ohio but below New York’s 51% levy
Lawmakers in North Carolina approved a tax rate increase on online sports betting platforms, pushing the levy from 18% to 23% in June 2026. This represents the first adjustment since the market became operational in March 2024.
The modification adds an additional five percentage points to the amount licensed platforms must remit to the state based on their gross gaming revenue.
Surging Handle Drives Legislative Action
Wagering activity in the state has shown consistent upward momentum. May 2026 recorded over $561 million in total handle, representing the ninth consecutive month where betting volume surpassed the $500 million threshold.
Comparing five-month periods, January through May 2025 generated $3.0 billion in wagers, while the identical timeframe in 2026 produced $3.2 billion. Since the market opened, cumulative wagers have topped $15 billion.
Operator gross revenue reached $1.6 billion since the March 2024 launch, yielding $299 million in state tax collections. According to analysis from WRAL’s Brian Murphy, implementing the 23% rate from day one would have produced an additional $83 million for state coffers.
The incremental revenue will be allocated toward problem gambling resources, youth athletic programs, the Major Events, Games and Attractions Fund, and athletic programs across 13 universities within the UNC System. Additional distributions support education initiatives, public safety operations, transportation infrastructure, and healthcare services via the general fund.
House Speaker Destin Hall praised the program’s performance. “It’s been a tremendously successful policy in this state,” he remarked. “A lot of people apparently like to do that sort of thing for one reason or another.”
Before settling on the 23% figure, legislators explored a more aggressive proposal that would have set the rate at 50%.
Industry Groups Challenge the Tax Increase
Operating companies have voiced strong opposition to the adjustment. The Sports Betting Alliance, serving as the industry’s representative body in North Carolina, characterized the hike as punitive toward operators who have already contributed hundreds of millions in state revenue.
“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,” the organization stated.
FanDuel distributed electronic communications to its customer base suggesting the change could negatively impact collegiate athletics funding. “Legal sports betting is generating real revenue for collegiate athletic departments across the state,” the message read. “A tax hike would threaten that funding and hit fans.”
At 23%, North Carolina now exceeds New Jersey’s 19.75% rate, Massachusetts’ 20%, and Ohio’s 20%. However, it remains below Pennsylvania’s 36%, Illinois’ tiered structure ranging from 20% to 40%, and the 51% rates implemented in New York, New Hampshire, and Rhode Island.
Delaware maintains a 50% tax rate.
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