In June 2023, North Carolina decided on an initial timeline for the launch of its sports betting industry.
In March 2024, the Tar Heel State officially introduced online sports betting with an established 18% tax on gross betting revenue minus winnings paid back to bettors.
Now, Senate Republicans want to double the tax rate on sports wagering operators to 36%, a change that would significantly shake up the state’s sports betting landscape.
According to WRAL News, if given the green light, the decision would place the state among the highest-taxed markets in the country, alongside Pennsylvania at 36%, Illinois at up to 40%, Delaware at 50%, and New York and New Hampshire at 51%.
College Athletic Programs, Main Beneficiaries
The suggested hike is expected to draw strong pushback from major players in the betting industry, such as DraftKings and FanDuel.
Still, with Republicans holding a strong majority in the Senate, leadership appears confident the two-year budget will pass this week.
The financial impact of such a tax increase could be substantial. Since the official launch of online sports betting, operators have already paid more than $135 million in taxes.
A jump to 36% would dramatically boost that figure, and lawmakers want to direct a large portion of that revenue toward college athletic programs across the state.
One of the more surprising provisions in the proposed budget requires both UNC-Chapel Hill and NC State to schedule men’s and women’s basketball games against other schools within the University of North Carolina system.
The goal? Spread the wealth and increase exposure for smaller schools in the network.
Under the proposed funding model, UNC and NC State, which are not included in the funding program currently covering 13 schools in the UNC System, would receive $24.4 million for the fiscal year that starts July 1 and $31 million in the fiscal year that starts July 1, 2026.
At the moment, the departments that are included in the program are handed $300,000 from the sports betting tax revenue, plus 20% of the remaining proceeds after initial distributions.
If the proposal passes, other UNC system schools will get between $500,000 and $1.5 million, depending on their size and athletic program needs.
Highlights include UNC-Greensboro, North Carolina A&T, UNC-Asheville, UNC-Wilmington, Western Carolina, and NC Central, which would receive $1 million, and East Carolina, Appalachian State, and UNC Charlotte would receive the maximum amount.
Extending the Success
Senate leader Phil Berger, a Republican representing Rockingham County, explained the thinking behind the move, speaking about the “success of the sports wagering program itself” as “something that has inured to the benefit of many of the campuses.”
Accordingly, Berger added that senators wish to extend the benefit to other campuses.
If passed, the measure would mark a dramatic expansion in the way North Carolina regards sports betting.
In the past, other lawmakers attempted to introduce bills aimed at using sports wagering tax revenue for other programs.
For example, House Bill 384 proposed using part of the revenue to offset a tax deduction for members of the National Guard, while Senate Bill 657 proposed using a portion of the revenue to provide stipends for high school coaches. Senate Bill 533 proposed sending more funds to programs that prevent gambling addiction.