TLDR
- North Carolina’s SB 595 would require sportsbooks to report bettors with $2,000+ in annual winnings to the state
- Bettors cannot deduct losses from winnings under current NC state tax law
- A separate proposal would raise the sportsbook tax rate from 18% to 23%
- Some provisions were added late to the bill without full review
- The bill now heads to Governor Josh Stein for approval
North Carolina lawmakers have passed a tax bill that puts sports bettors under closer watch. Senate Bill 595 includes a new rule that would require sportsbooks to hand over data on bettors who win $2,000 or more in a year.
The reporting requirement would give the state Department of Revenue access to a bettor’s name, address, tax ID, wagers placed, outcomes, and total winnings. Lawmakers say the move brings the state in line with federal reporting standards.
What Bettors Are Upset About
The backlash has been quick. The main complaint is that North Carolina does not let bettors deduct their losses on state tax returns. That means a player who wins $2,000 and loses $2,000 still owes state tax on the full $2,000 in winnings.
A recent federal change made things harder too. The federal deduction for gambling losses is now capped at 90%, squeezing bettors from both sides.
Critics online have pointed out that North Carolina already shares data with the IRS. The state can already see W-2G forms and federal tax returns. The new rule would give state officials even more detail once a bettor crosses the $2,000 mark.
Some commenters warned the rule could be applied retroactively, with concern it “starts with last year.”
Senate leader Phil Berger has said he supports allowing bettors to deduct losses and believed the current bill already included that language. But that point remains unsettled.
Late Additions Draw Criticism
The bill passed as a conference report this week. Critics say some provisions were dropped in at the last minute without proper review.
Sen. Tom McInnis, one of the bill’s authors, admitted the final version had “a couple of late provisions that some of you didn’t see.” He still defended the overall work on the legislation.
The bill now goes to Governor Josh Stein for his signature before it becomes law.
A Separate Tax Hike Is Also in Play
Running alongside SB 595 is a second proposal. That one would raise the tax on sportsbooks from 18% to 23% of gross wagering revenue.
This increase would come through the state’s 2026 budget, which lawmakers must pass by June 30. A House budget writer confirmed the chamber agreed to the hike, but no enacted bill has made it official yet.
Last year, the Senate pushed to double the tax rate to 36%. That effort failed after the House and Senate could not agree before the session ended.
If passed, North Carolina would join Illinois, Ohio, Maryland, Louisiana, and New Jersey in raising sportsbook taxes in recent years.
