In just 12 months, bettors in the state placed more than $6.6 billion in wagers, resulting in over $729.3 million in gross wagering revenue across the eight licensed NC sportsbooks: bet365, BetMGM, Caesars, DraftKings, ESPN Bet, FanDuel, Fanatics, and Underdog.
That performance translated into $135 million in tax revenue for the state, well beyond early projections that anticipated reaching $100 million annually after five years.
The state’s immediate success has state officials and lawmakers taking action. While the betting boom has already led to millions flowing into public programs, including funding for amateur sports and gambling education, the state is now eyeing even bigger returns through regulatory shifts and a dramatic increase in tax rates.
From Fast Start to Fast Changes: Lawmakers Propose 36% Tax Rate
The North Carolina Senate has already passed a two-year, $65 billion budget plan that includes a provision to double the current 18% tax rate on sports betting to 36%. If approved by the House, the new rate would take effect in October 2025.
This would place North Carolina among the top five highest sports betting tax states, trailing only New York (51%), New Hampshire (51%), and Delaware (50%), and tying Pennsylvania’s flat 36% rate.
Senate Republicans argue the tax hike is a fair adjustment given the market’s early outperformance and potential to generate more than $79.8 million in additional annual revenue by FY 2026-27.
“It was a very successful year in my opinion,”
said Sterl Carpenter, chief business development officer of the state lottery.
“Things went extremely well.”
But the changes don’t stop with taxes. The budget would also overhaul how tax revenue is distributed. Currently, 13 UNC System schools receive $300,000 annually plus 20% of remaining proceeds.
The new structure would bump those minimum payouts up to $500,000 to $1.5 million, depending on the institution. UNC and NC State — two of the state’s flagship universities — would also be added to the funding pool and are projected to receive $24.4 million and $31 million over the next two fiscal years, respectively.
However, there’s a catch: both schools would be required to play basketball games against all other UNC System schools — three against Division II programs and two against Division I schools — by the 2039-40 season.
“This is tied to the sports gambling changes,”
a Senate GOP spokesperson explained, linking the competitive mandate to their elevated funding status.
Regulation Bills Also on the Table Amid Rapid Market Growth
Beyond tax increases, lawmakers are considering several bills that would further shape the North Carolina sports betting landscape. House Bill 828, for instance, seeks to ban prop bets on college athletes, aiming to protect young student-athletes from undue pressure and scrutiny.
Senate Bill 657 would allocate $11 million of tax revenue toward stipends for high school coaches, while Senate Bill 533 proposes increased investment in gambling addiction services.
Meanwhile, North Carolina’s staggering $131.3 million in year-one tax revenue stands in sharp contrast to neighboring Georgia, where a similar-sized population has yet to legalize sports betting due to political gridlock.
As Senate leader Phil Berger put it,
“The success of the sports wagering program itself is something that has inured to the benefit of many of the campuses, and we wanted to extend it.”
With momentum at their back, North Carolina officials are betting that increased taxes and strategic reforms can take this red-hot market to even greater heights.
