Betting companies, anti-tax group push against proposed NC sports-betting tax hike

A prominent anti-tax conservative has joined the fight against the North Carolina Senate’s proposal to double the tax rate paid by legal online sports betting operators.

Sports betting operators have lined up against the proposed increase, urging their users to contact lawmakers and warning of worse odds and fewer promotions if the tax rate hike goes into effect.

The Senate’s budget proposal, which passed the chamber on April 17, would increase the tax rate from its current 18% to 36%, putting it among the highest in the nation.

In April, North Carolina collected $8.4 million in taxes off $46.8 million in gross wagering revenue, according to the lottery commission. Bettors in the state wagered more than $576 million in the month, the second-lowest amount, behind February, since September.

Since the launch of sports betting in the state in March 2024, North Carolina has collected more than $143.7 million in taxes off more than $7.8 billion in total wagers.

The proposed rate increase caught the attention of Grover Norquist, president of Americans For Tax Reform. The group asks all candidates for federal and state office to commit in writing to opposing all net tax increases.

“While this tax hike is targeted on a politically unsympathetic and convenient target, we’ve seen cautionary tales play out in other states that took a similar confiscatory approach to gaming taxation,” Norquist wrote in a letter addressed to state Senate leader Phil Berger and sent to all members of the Senate on April 17.

Illinois implemented a tiered system for taxation with an upper level of 40% for the operators with receipts over $200 million. That move “made the market harder for both companies and bettors” in the state, Norquist said in the letter.

North Carolina lawmakers legalized sports betting in 2023 after a multi-year fight that saw the tax rate for operators increase from 8% in an April 2021 proposal to 18% by the time of passage. Legal betting launched on March 11, 2024, with eight legal operators, and the state’s wagering totals have far surpassed any projections.

There are eight sports betting operators permitted to operate in North Carolina. Those companies took in more than $6.7 billion in paid bets from March 2024 through March 2025. Bettors wagered another $509 million in promotional wagers. The sports books had $752 million in gross wagering revenue, as calculated by the North Carolina Lottery Commission, and paid 18% in taxes on that figure as prescribed by law. The operators paid $135 million in taxes through March.

This is not the first time Norquist has weighed in on North Carolina’s sports betting law. In a 2023 letter to members of the Senate’s finance committee, he urged lawmakers to reinstate operator-friendly provisions designed to reduce their tax payments. They were not added back to the bill, which eventually passed.

The Sports Betting Alliance, which represents betting operators Bet MGM, Draft Kings, FanDuel and Fanatics Sportsbook, is urging bettors to contact state lawmakers.

“We need sports fans like you to stand up and tell your state lawmakers to protect legal sports betting in North Carolina,” the alliance wrote on its website. The site allows people to fill out a pre-written letter form to be sent to lawmakers. More than 14,500 have been sent.

The group says that more taxes mean worse odds and access to fewer promotions and bonuses, and may drive players to illegal markets.

The Senate’s proposed budget also significantly changes how the tax revenue is distributed, giving more funding to athletics departments at UNC System schools and adding NC State and North Carolina to the distribution pool for the first time.

The legislature’s fiscal analysis says that the two ACC schools would receive $54 million over the next two fiscal years if the Senate budget proposal were to become law.

A North Carolina House bill that would allow bettors to deduct their gambling losses from their winnings for state tax purposes is unlikely to advance this session. Federal tax law allows for the deduction. Rep. Erin Pare, a Wake County Republican who is a chair of her chamber’s appropriations committee, said she doesn’t expect House Bill 14 to get a committee hearing. Berger previously said he was opposed to the measure.

North Carolina bettors were paid more than $4.8 billion in winnings in 2024, all of which was required to be claimed on state income tax returns. At the state’s 4.5% tax rate in 2024, that would equal more than $216 million for the state.