North Carolina lawmakers have finalized an increase in the state’s online sports betting tax rate to 23% from 18%, a move that will place the state among the higher-tax jurisdictions for sportsbooks in the United States when it takes effect with the new fiscal year on July 1.
State Senator Jim Burgin confirmed the new rate after weeks of negotiations over how much operators should pay. Lawmakers had reportedly considered a range between 20% and 30%, while earlier proposals included rates of 36% and even 50%.
The increase pushes North Carolina ahead of New Jersey’s 19.75% rate and the 20% rates in Massachusetts and Ohio.
However, it remains below Pennsylvania’s 36% tax and the rates in New York, New Hampshire and Rhode Island, where operators share 51% of revenue with the state. Delaware imposes a 50% rate, while Illinois uses a progressive structure ranging from 20% to 40%.
The tax hike concludes a lengthy debate among state lawmakers despite opposition from sports betting operators and industry groups, which argued that higher taxes could reduce incentives for customers and affect the competitiveness of the regulated market.
North Carolina House Speaker Destin Hall said lawmakers were seeking to align the state with broader industry trends.
“I think, on our side of the building, it’s more so looking at, ‘How do we line up with other states?’ We want to be on the average of what other states are doing on a lot of these rates,” Hall told WRAL earlier this month.
Hall added that lawmakers were cautious about making major changes to a market that has performed well since launch.
“A lot of the ideas are out there. I think we’re somewhat hesitant to tweak too much a program that’s worked pretty well for the state, all things considered,” he said.
Online sports betting launched in North Carolina in March 2024 and has generated more than $1.6 billion in operator revenue. The state has collected nearly $300 million in taxes under the 18% rate.
During the 2025/26 fiscal year, North Carolina collected about $133 million in sportsbook taxes. At the newly approved 23% rate, tax revenue for the period would have totaled about $170 million, generating roughly $37 million in additional revenue.
The Sports Betting Alliance and its member operators had urged residents to oppose the increase, warning that customers could bear the cost through reduced promotions and incentives.
FanDuel said in a message to customers that legal sports betting was helping fund collegiate athletics across the state.
“Legal sports betting is generating real revenue for collegiate athletic departments across the state,” the company said. “A tax hike would threaten that funding and hit fans.”
Industry observers have also warned that higher taxes could make offshore sportsbooks more attractive to some bettors if licensed operators scale back promotions or adjust pricing to offset increased costs.