North Carolina Agrees to 23% Sports Betting Tax Increase

Lawmakers in North Carolina have reached a compromise to increase the tax rate on online sportsbook operators from 18% to 23%, bringing months of discussion on how much betting companies should pay into state funds to an end.  

The increase is part of current state budget negotiations and comes after earlier proposals that suggested higher rates. Senator Jim Burgin confirmed the 23% figure, noting he had been in favor of a 50% rate, while the Senate also suggested a 36% rate last year.  

The tax change comes as the North Carolina sports betting market continues to grow. Since legal sports betting was launched in March 2024, sportsbooks have produced $1.6 billion in gross wagering revenue and added $299 million in tax revenue to the state. If the proposed 23% rate had been in place from the start of legalization, the state would have taken an additional $83 million in revenue.  

The increase in betting activity has continued through 2026. Figures produced by the North Carolina State Lottery Commission showed $561 million handled in May by North Carolina sports betting apps, making it the ninth consecutive month in which handle was more than $500 million. Between January and May, the state’s sportsbooks took $3.2 billion in wagers, up from the $3 billion for the same time in 2025. 

The revenue generated by sports betting goes toward gambling addiction treatment and education programs, youth sports initiatives, an events fund, school athletics departments, and the state’s general fund.  

However, North Carolina’s proposed tax increase has faced opposition from industry bodies. The Sports Betting Alliance argues that higher taxes could hurt licensed operators without benefiting customers or the regulated market. Operators continue to offer lucrative North Carolina sportsbook promos.

Rhode Island considers expansion

North Carolina isn’t the only state to be changing its market. In Rhode Island, lawmakers are also considering sports betting legislation to expand the state’s sports betting market while reducing the state's share of betting revenue. 

Senate Bill 3118, introduced by Senators Frank Ciccone, John Burke, and Stefano Famiglietti, would open the Rhode Island sports betting market to between four and six online and retail sportsbook operators, ending the current exclusivity arrangement between the Rhode Island Lottery and IGT, under which Sportsbook Rhode Island remains the state’s only online sportsbook. 

The legislation would also reform Rhode Island’s revenue-sharing model. Currently, the state gets 51% of online sports betting revenue, one of the highest tax rates in the US. Under the proposal, the state’s share would drop to 12% once fiscal year revenue targets are met. 

The Rhode Island Lottery would still retain regulatory oversight of sports betting in the state and would be responsible for managing the licensing process.  

If it is approved, the bill would require the lottery to award between four and six sportsbook licenses by 1 January 2027.