Sports bettors operators in North Carolina are facing another tax hike as lawmakers engage in renegotiations around the budget, according to reports.
The current tax system, which taxes operators at 18%, has raked in more than $250 million in revenue from the eight sportsbook operators working within the state. However, lawmakers are now discussing whether to increase the rate to between 20% and 30%.
Individual sports bets also face additional tax
Reports suggest sports bettors may also feel the pinch, with individual wagers in the crosshairs of lawmakers. Betting is seen as an easy target by elected officials, who are trying to get creative in a demanding fiscal year.
However, any move will likely face stiff political headwinds and even more ferocious pushback from industry lobbyists.
The Sports Betting Alliance (SBA), which includes major operators such as DraftKings, FanDuel and BetMGM, is organizing opposition to any proposed North Carolina sports betting tax increase, similar to its successful pushback last year against a Senate plan to raise the rate to 36%.
Budget talks remain divided between the House and Senate, while Governor Josh Stein, a supporter of legal sports betting, is expected to resist measures that significantly increase costs for operators or bettors.
The debate comes as operators warn higher taxes could curb investment in North Carolina’s young sports betting market, which launched less than two years ago. DraftKings recently cited Illinois’ tax structure in its decision to close its retail sportsbook at Wrigley Field, highlighting industry concerns over rising costs. Analysts say steep tax hikes could reduce promotions, slow market growth or, in extreme cases, prompt some operators to surrender licenses.
There are other concerns from within the industry about driving punters to illegal sites. Last year, Attorney General Jeff Jackson and a bipartisan coalition of 50 attorneys general urged the U.S. Department of Justice to crack down on illegal offshore gambling operations, arguing the unlicensed platforms routinely violate state and federal laws while lacking consumer protections.
The group said illegal online gambling generates more than $400 billion in annual wagering volume, costing states an estimated $4 billion in lost tax revenue each year.
Budget under pressure to pass after failing to pass last year
The North Carolina General Assembly has until August to adjourn its session, but lawmakers are under pressure after failing to reach a unified budget agreement last year. Any sports betting tax increase included in a final budget deal could take effect July 1, the start of the state’s new fiscal year.
Bettors would likely feel the effects indirectly if operators face higher taxes. Industry analysts say sportsbooks could respond by scaling back promotional offers, offering less favorable odds or reducing marketing spending as they adjust to higher operating costs.
The outcome of North Carolina’s debate is being closely watched nationwide as more states consider raising sports betting taxes to boost revenue. Operators and lawmakers alike view the state as an early test of how far legislatures can push tax rates in newer betting markets.
North Carolina basketball team linked to NBA betting scandal
Meanwhile, North Carolina A&T Aggies men’s basketball has been linked to an illegal gambling investigation connected to betting cases involving former NBA player Jontay Porter and current NBA guard Terry Rozier, according to a recent ESPN report.
The report identified North Carolina A&T as one of several college programs tied to suspicious betting activity this season.
The development comes days after the Aggies suspended guards Ryan Forrest, Julius Reese and Landon Glasper for violating team rules. The university has not disclosed further details, and it remains unclear whether the suspensions are connected to the gambling investigation. Athletic director Earl Hilton told ESPN the players were disciplined for violating “well-established team rules.”
ESPN reported sportsbooks detected unusual betting activity surrounding North Carolina A&T’s game against University of Delaware, including significant movement on the first-half point spread. Forrest scored 26 points in the game, while Glasper added 11 in a 98-88 loss.
The National Collegiate Athletic Association (NCAA) said it is committed to protecting the integrity of competition and student-athlete well-being. Other programs reportedly tied to the investigation include Temple University, Eastern Michigan University and Mississippi Valley State University.
