North Carolina Senate Votes to Raise Online Sports Betting Tax to 23%

The North Carolina Senate voted 27-18 on June 23 to raise the tax on online sportsbooks from 18% to 23% of gross gaming revenue, packaging the increase inside Senate Bill 595 alongside a new requirement that operators report any customer who wins more than $2,000. The bill still needs approval from the state House before it reaches Governor Josh Stein, so the higher rate is not law yet. If it passes, North Carolina joins a growing list of states reopening sports betting tax rates after launch, a trend that is already reshaping how operators price bets and promotions across other states.

The math behind the vote is straightforward. North Carolina launched online sports betting on March 11, 2024, and through May 2026 the regulated market produced about $1.6 billion in gross wagering revenue and roughly $299 million in state tax. State analysts cited by Sportsbook Review estimate that if the 23% rate had applied from day one, North Carolina would have banked an additional $83 million. The market is not slowing: through May 2026 sportsbooks cleared $500 million in handle for the ninth straight month, and January-to-May handle hit $3.2 billion, up from $3 billion over the same stretch of 2025. That growth is exactly why legislators keep returning to the rate. Republican Senator Jim Burgin, who backed the bill, said he had initially favored a rate as high as 50%, and the Senate passed a 36% proposal last year before it died in a House-Senate split. Seen against that history, 23% reads as a compromise rather than a ceiling.

How North Carolina compares

At 23%, North Carolina would sit in the middle of the national pack: well above newer low-tax states but far below New York and the per-bet experiment running in Illinois. The table below sets the new rate against the markets operators watch most closely.

Seven operators currently run mobile books in the state after Underdog exited in December 2025: FanDuel, DraftKings, BetMGM, Caesars, bet365, Fanatics and theScore Bet, the rebrand of ESPN BET. Each is tied to a North Carolina sports partner, from DraftKings with NASCAR to FanDuel with the PGA Tour and Fanatics with the Carolina Hurricanes. The Sports Betting Alliance, the lobbying group whose members include DraftKings and FanDuel, opposes the increase and argues a higher rate disadvantages licensed operators without helping consumers or the regulated market. That is the standard industry line, but it is worth noting both of those companies recently left the American Gaming Association and now lobby largely on their own terms.

What it means for operators and affiliates

The five-point jump matters because of what happened the last two times states pushed sports betting taxes up after launch. Ohio doubled its rate from 10% to 20% in 2023, six months after going live, and operators absorbed it: promotions and standard lines stayed on offer, and no book pulled the threatened "draconian" pricing moves. Illinois went further. After the state layered a per-wager fee on top of its graduated tax in July 2025, FanDuel and DraftKings both added a per-bet surcharge of $0.25 to $0.50 starting September 1, and smaller operators imposed minimum bet sizes of $1 to $10 instead. The behavioral effect showed up fast. Illinois online bet counts fell about 15% year over year in September 2025, to 30.2 million, even as handle rose 9% to $1.42 billion, meaning bettors placed fewer, larger wagers to dodge the per-ticket cost.

North Carolina's increase is a rate hike on revenue, not a per-bet fee, so the Ohio precedent is the closer comparison: expect operators to absorb most of it rather than itemize a surcharge. The more likely lever is promotional spend. Industry representatives quoted in the originating coverage warned that a higher rate could prompt books to scale back promotions and offer less competitive odds, and that thinner promos could push some players toward offshore platforms. For affiliates, that is the line to watch. North Carolina has been a reliable source of welcome-bonus traffic since launch, and any retreat on free-bet credits or odds boosts directly compresses the conversion offers affiliates earn against. The same dynamic is already reshaping affiliate economics where state policy is squeezing the regulated funnel.

The $2,000 reporting requirement is the quieter provision but a meaningful one. By forcing licensed sportsbooks to report customers who clear that threshold, the state is targeting underreported gambling income, which adds a compliance cost for operators and a tax-filing wrinkle for winning bettors. North Carolina has collected roughly $133 million in operator tax in fiscal 2026 alone, per the State Lottery Commission, and the reporting rule is aimed at the income tax side that sits outside that figure. The House has not scheduled its vote, and with the Senate already on record, the rate that lands on Governor Stein's desk will decide whether North Carolina settles at 23% or whether the chambers split again the way they did over the 36% plan.