North Carolina legislators are weighing a proposal to significantly increase taxes on sports betting operators, with discussions reportedly centering on a rate that could get to 30%. Ongoing state budget negotiations have included recommendations to raise taxes on sports wagering revenue. There is also consideration of a per-wager fee structure similar to the one introduced in Illinois last year.
North Carolina sportsbooks currently face an 18% tax on gross sports betting revenue. Since the state’s online sports betting market launched in 2024, operators have generated more than $287 million in tax payments for the state.
If lawmakers move forward with this increase, however, the added costs could eventually impact users as much as operators.
In states with higher tax rates, sportsbooks have often responded by scaling back promotional offers, reducing bonus value, and adjusting odds to protect margins. That can translate into less favorable pricing for bettors over time, especially as operators compete less aggressively for customers.
There is also the possibility that sportsbooks could introduce direct fees on wagers. Illinois opened the door to that approach after implementing a per-bet tax structure, leading some operators to explore ways to offset the additional expense. This included FanDuel and DraftKings.
Earlier this year, DraftKings announced it would close its retail sportsbook at Wrigley Field in Illinois, a move that came after the state adopted a more aggressive tax framework for sports betting operators.
While the additional revenue an increased tax rate generates could help state programs, it creates an unfavorable environment that could push players to offshore platforms.
As operating costs rise, sportsbooks often respond by reducing promotions, offering less favorable odds, or introducing additional fees tied to wagers. Those changes can make regulated sportsbooks less attractive to consumers, particularly price-sensitive bettors who actively compare value across platforms.
That environment can create an opening for offshore betting sites, which operate outside U.S. regulatory oversight and are not subject to the same tax burdens or compliance requirements. Because offshore operators avoid many of the costs tied to licensed markets, they can sometimes offer more aggressive promotions or pricing to attract users away from legal sportsbooks.
However, offshore platforms do not provide the same consumer protections available through regulated operators. Bettors using unlicensed sites may have limited recourse in disputes involving payouts, account restrictions, or data security issues. In addition, offshore sportsbooks do not contribute tax revenue to the state, reducing the economic benefits lawmakers are attempting to increase through higher tax rates.
To this end, increasing the tax rate would have a negative impact on sports bettors.
The Sports Betting Alliance, which represents top operators like bet365, BetMGM, DraftKings, Fanatics, and FanDuel, criticized earlier proposals to increase the state’s tax structure on sportsbooks.
Higher operating costs are often transferred to bettors. These changes could make regulated sportsbooks less appealing and weaken the advantages of betting through licensed operators.
It remains to be seen whether pushback can generate enough momentum to slow down an increase in North Carolina sports betting tax rate.
