Part of the pushback against sports betting is in the negative effects it can have, including building addiction and fiscal irresponsibility among those who can’t gamble responsibly. Those potential downsides make it all the more glaring that sports betting is growing at a rapid rate in the country, leading to unexpected ripple effects such as the introduction of gambling in adjacent markets like adult arcades.
North Carolina recently had another example of NC sports betting being brought into the zeitgeist in an unanticipated manner, with Governor Roy Cooper suggesting that legislators pass a measure that would allow gambling losses to be tax deductible.
Sports Betting Expected to Generate a Lot of Tax Revenue in North Carolina
With the revenue it can bring in for a state, sports gambling and taxes were always going to be intertwined topics. Plus, generating tax dollars for social services and public assistance would help remove some of the negative connotations surrounding gambling by giving it a positive by-product.
North Carolina only legalized online sports betting a few months ago, with HB 347 passing in the summer of 2023 and NC online sportsbooks opening operations in March earlier this year. The state already has high expectations for the industry, though. According to the Atlanta Journal-Constitution, North Carolina is projected to pull in over $64 million in tax revenue from sports betting in its first full year. By 2027-28, that number is expected to climb to over $100 million.
How Governor Cooper’s Proposal Would Affect North Carolina
The state has assigned most of its sports betting tax revenue toward youth athletics programs and higher education. $2 million per year has been designated for the Department of Health and Human Services to help combat gambling addiction. North Carolina Amateur Sports will receive $1 million annually to use towards maintenance and equipment. $300,000 each will go to eligible colleges in the state to help support their athletics. An additional $1 million will go to the North Carolina Outdoor Heritage Advisory Council to be redistributed as grants to local sports programs to help cover expenses and travel. Half of any remaining revenue would go to the general fund while the remaining half would be split between the 13 eligible colleges and the North Carolina Major Events, Games, and Attractions Fund.
Governor Cooper’s proposed plan to make gambling losses tax deductible would severely impact the amount of tax revenue that the state would generate from sports betting. Cooper stated on Twitter that North Carolina’s current taxes on gambling are unfair:
“When it comes to sports wagering, it’s not fair to have to pay taxes on your winnings without being able to deduct your losses. Legislators should fix this.”
10 other states do not allow their residents to deduct their gambling losses on their taxes. North Carolina is slated to remain in that group for the near future, as proponents of sports betting in the state have been against Cooper’s proposal and the bill has yet to entice a legal champion in the legislature.
