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It was a rough March for the eight sportsbooks operating in North Carolina, as they combined for only $38.1 million in gross revenue last month, making it their worst performance since the March 2024 launch. Now it could get even worse for sportsbooks in "The Tar Heel State," with the state recently proposing a 36% sports betting tax rate, double where it currently stands at 18%. 

State Senate Republicans in North Carolina put forth a budget proposal earlier this week for the 2025-27 fiscal cycle. The provision of doubling the sports betting tax rate to 36% would go into effect on Oct. 1, 2025, if it is approved. Let's take a look at more details surrounding the potential tax hike, as well as comparing it to what other states have done.

North Carolina is following other states' leads

After Illinois signed a law that increased sports betting tax from 15% for all sportsbooks to as high as 40% in what was a newly-devised bracket system in July 2024, several states have been looking to up their percentage, as well. But the early results in 2025 haven't been as successful. 

Ohio Gov. Mike DeWine tried to increase his state's sports betting tax rate from 20% to 40%, but that was scratched from the budget earlier in April. Maryland Gov. Wes Moore first tried for a 15% to 30% increase and then a 15% to 20% increase, but both of those proposals failed. 

New Jersey Gov. Phil Murphy threw in raising taxes for both sports betting and online casinos up to 25% in his proposed budget, while a different proposal introduced to the state's House opted for even higher at 30%. 

In 2024, Massachusetts tried to raise its sports betting tax from 20% to 51%, with that proposal failing. Increases have been brought up in other states such as Indiana, Louisiana and Michigan, but nothing else has passed yet besides Illinois in 2024 and Ohio going from 10% to 20% back in 2023, a few months after sports betting launched in the state. 

The highest sports betting tax rate for any state is 51%, which is what New York, New Hampshire and Rhode Island have levied.

Implications for UNC System schools

Currently, 13 UNC System schools each get $300,000 of what the state received from sports betting taxes, as well as 20% of the remaining proceeds after other required distributions are made. That does not include the University of North Carolina and North Carolina State University, but those two colleges would be added if this proposal was approved.

The new structure would be that UNC system schools would receive a minimum of $500,000, with some being able to land as much as $1.5 million. But that would almost mean that North Carolina and NC State would be required to play other UNC system schools such as Appalachian State, UNC Wilmington, East Carolina and UNC Asheville in basketball.