North Carolina has a new state budget, and with it comes major changes for the state's gambling industry. Gov. Josh Stein signed Senate Bill 257 into law, approving the first full state budget North Carolina has passed in more than two years. The legislation significantly changes how sports betting and prediction markets are taxed.
The budget introduces a major change to the state's tax on licensed online sportsbooks, increasing it from 18% to 23%. This is the first tax hike since legal online sports betting launched in North Carolina in 2024. The higher rate is part of a wider effort to revise gambling taxes, generate additional state revenue, and change how betting tax proceeds are allocated.
The budget also introduces a 6% tax on the net trading fee revenue earned by federally regulated prediction market operators. This marks the first time North Carolina has specifically taxed platforms offering event contracts. Unlike licensed sportsbooks, however, prediction market operators will continue operating without additional state regulatory requirements under the new budget.
The difference between the two tax rates has already sparked debate. Supporters say the state should collect revenue from an expanding industry that already falls under federal oversight. Critics argue the lower 6% rate, combined with the absence of state regulation, could give prediction market companies an advantage over licensed sportsbooks.
Stein said the budget was imperfect but concluded it deserved his signature. "This budget has real flaws. It cuts vacant state government positions that are helping western North Carolina recover from Hurricane Helene and helping keep our air and water clean," Stein said. "Despite these shortcomings, I am signing this budget because, on balance, it makes meaningful investments in North Carolina's people."
With Stein's signature, the higher sportsbook tax will now take effect, while the new prediction market tax positions North Carolina among the first states to formally include federally regulated prediction market operators within its tax system.
