Sports entities retaliate following proposals by North Carolina lawmakers to nearly double the tax rate
Want to squeeze more from North Carolina's legal sports betting market? State lawmakers are thinking the same! The spectacular $685 million handle in March 2025, fueled by March Madness frenzy, has lawmakers eyeing the pot of gold.
A new proposal, introduced to the state Senate this week, suggests doubling the current tax rate from 18% to a whopping 36%. If approved, North Carolina would join the exclusive club of only five states boasting such flat tax rates.
Lawmakers reckon this tax surge could pump an additional $53 million into the state coffers during the 2025-2026 fiscal year. Not bad, huh?
But hold your horses! The sportsbook operators aren't sitting quietly. DraftKings, one of the eight licensed operators, has already mobilized its customers in North Carolina against this proposed measure.
North Carolina isn't the first state to toy with the idea of hiking sports betting taxes. Illinois beat them to it when it introduced a tiered system, capping rates at a staggering 40% in July 2024. The governors of Ohio and Maryland tried to double their taxes but failed, while New Jersey and Massachusetts are currently mulling over similar proposals.
Interestingly, Illinois' tiered system has served as a model for other states to consider similar tax hikes[2]. In Ohio, a proposal to double the tax from 20% to 40% (previously increased from 10% in 2023) faltered in April 2025 after repeated failures in Maryland[2][3][5]. Governor DeWine was aiming for a whopping $180 million annual revenue to fund stadium infrastructure[5].
In Maryland, Governor Moore proposed increases from 15% to 30%, and then from 15% to 20%, but both efforts failed in 2025[2][4].
Keep an eye on North Carolina, New Jersey, and Massachusetts as they deliberate over potential tax rate changes. For now, North Carolina continues to charge a rate of 18%, with New Jersey and Massachusetts maintaining their rates at 13% and 20% respectively[1].
- The potential doubling of the current tax rate on sports betting in North Carolina, from 18% to 36%, could generate an additional $53 million for the state during the 2025-2026 fiscal year.
- if approved, North Carolina would join a select group of five states with flat tax rates of 36% or more on sports betting.
- Sportsbook operators, such as DraftKings, are opposing the proposed tax hike in North Carolina, seeking to maintain lower rates for their businesses.
- The idea of increasing sports betting taxes is not new, as states like Illinois have already implemented a tiered system with rates of up to 40%, but attempts to double taxes in Ohio and Maryland have been unsuccessful.
- The development of sports betting tax policies and legislation in North Carolina, New Jersey, and Massachusetts is worth monitoring, as they each consider potential rate changes for their respective markets.
