TLDR
- North Carolina lawmakers raised the online sports betting tax rate from 18% to 23%
- Bettors placed over $561 million in wagers in May 2026 alone — the ninth straight month above $500 million
- Since launch in March 2024, the state has collected over $299 million in tax revenue
- The Sports Betting Alliance warned the hike penalizes regulated operators who already contribute hundreds of millions in taxes
- North Carolina now sits above New Jersey, Massachusetts, and Ohio in tax rates, but well below New York’s 51%
North Carolina has raised its online sports betting tax rate from 18% to 23%, making it the first rate change since the market launched in March 2024.
Lawmakers approved the 5% increase as betting activity in the state continues to grow. In May 2026, bettors placed over $561 million in wagers. That was the ninth month in a row that total bets exceeded half a billion dollars.
Since legalization, North Carolina bettors have placed more than $15 billion in legal wagers. Gross operator revenue has reached $1.6 billion, generating over $299 million in tax revenue for the state.
A more aggressive proposal to raise the rate to 50% was also on the table, but lawmakers settled on 23%.
Where the Money Goes
Tax revenue from sports betting is directed to several areas. These include gambling addiction treatment, youth sports programs, the Major Events, Games and Attractions Fund, and athletics departments at 13 University of North Carolina System schools.
Funds also flow into the general fund, which supports education, public safety, transportation, and health care.
House Speaker Destin Hall called the policy a success. “It’s been a tremendously successful policy in this state,” he said. “A lot of people apparently like to do that sort of thing for one reason or another.”
Had the 23% rate been in place from the start, the state would have collected an additional $83 million, according to WRAL journalist Brian Murphy.
Betting volume has also grown year over year. From January to May 2025, players wagered $3.0 billion. In the same period this year, that figure rose to $3.2 billion.
Operators Push Back
Not everyone is on board with the change. The Sports Betting Alliance, which represents licensed operators, said the tax hike punishes companies that have already contributed hundreds of millions to the state.
“This tax hike will only penalize licensed, regulated companies who have delivered hundreds of millions in tax revenue to the state and the UNC System athletic departments,” the group said in a statement.
FanDuel warned the increase could hurt college sports funding. The company told customers in a letter that legal sports betting is generating real revenue for collegiate athletic departments, and that a tax hike would threaten that funding.
With the new rate, North Carolina sits above New Jersey at 19.75%, Massachusetts at 20%, and Ohio at 20%.
However, it remains well below the top tier. New York, New Hampshire, and Rhode Island each take 51% of operator revenue. Delaware sits at 50%, Pennsylvania at 36%, and Illinois uses a tiered system ranging from 20% to 40%.
The new 23% rate places North Carolina in the upper-middle range of state sportsbook tax structures across the country.
