North Carolina Lawmakers Include Sports Betting Tax in Budget Proposal

A tax hike on sports betting revenues is on the docket in North Carolina’s Senate budget proposal, and it would also mandate that UNC and NC State basketball programs play against one of the several state schools to earn their share of the proceeds.

Senate Doubles Tax

Sportsbooks in the Tar Heel State currently pay 18% of their revenues to the state, but if the state senate has its way, that tax will be doubled to 36%, as stipulated in its two-year budget proposal. After launching sports betting on March 11, 2024, sports betting operators have paid the state $135 million in taxes in one year.

The budget is expected to pass this week in the Republican-controlled Senate, and athletic departments in the UNC System schools would see millions flow into their coffers as a result. As it stands right now, athletic departments at the state’s 13 UNC System schools receive $300,000 from sports betting revenues and also an additional 20% of the remaining proceeds after mandated disbursements are sent.

Tax Hike Jackpot

With the tax hike, that amount will increase on a staggered scale, with the athletic departments at Elizabeth City State University, Fayetteville State University, the University of North Carolina at Pembroke and Winston-Salem State University each receiving $500,000.

Athletic departments at North Carolina A&T, NC Central, UNC-Asheville, UNC-Greensboro, UNC-Wilmington, and Western Carolina would each receive $1 million, while those at Appalachian State, East Carolina and UNC Charlotte would be granted $1.5 million.

Once the remaining funds are dispersed to other earmarked state departments and organizations, 20% left over would then be shared amongst those schools, with an additional 10% directed to UNC, NC State and the North Carolina Major Events, Games, and Attractions Fund. Any money remaining would go to the state’s General Fund.

“It’s our feeling that the success of the sports wagering program itself is something that has inured to the benefit of many of the campuses, and we wanted to extend it to other campuses,” said Senate leader Phil Berger, a Rockingham County Republican.

Interstate Competition

Funding to the state’s two major D-1 basketball programs at UNC and NC State would require each school’s men’s and women’s teams to play at least three regular-season or exhibition basketball games against each UNC System school at the NCAA Division II level by the 2039-40 season. In addition, two regular-season games must also be played against each UNC System D-1 school, with one of those games being played on the road.

“This is tied to the sports gambling changes,” a spokesperson for Senate Republicans told a local news team. “With State and UNC in at a new ‘power conference athletics’ tier for the sports gambling revenue, it is our intent that they play the other system schools.”

North Carolinians have wagered $6.6 billion during its first year in operation between the state’s eight sportsbooks, including Bet365, BetMGM, Caesars, DraftKings, ESPN Bet, Fanatics Sportsbook, FanDuel and Underdog Sports.

No statement has been issued by any of the sports betting operators nor their industry lobbying group, the Sports Betting Alliance.