The North Carolina sports betting market has grown fast since launching in March 2024, and state lawmakers have taken notice. In June 2026, Senate Bill 595 passed with two significant changes that affect anyone betting in the Tar Heel State. One targets operators. The other targets you.
The Operator Tax Just Got Higher
Under Senate Bill 595, sportsbooks operating in North Carolina are subject to a 23% privilege tax on gross wagering revenue as of July 1, 2026, up from the previous 18% rate. The increase was finalized after negotiations that at one point included proposals as high as 50%. The final 23% rate puts North Carolina ahead of New Jersey, Massachusetts, and Ohio, though still below higher-tax states like Pennsylvania and New York.
The increase is aimed at generating additional state revenue, though analysts note the financial gain is modest relative to the size of the market. Industry groups pushed back on the hike, arguing that higher operator costs could trickle down to bettors in the form of reduced NC sports betting promotions and tighter odds.
What Bettors Owe on Their Winnings
The operator tax is not the only tax story when it comes to North Carolina sports betting. On the bettor side, all sports betting winnings are treated as taxable income under state law. North Carolina applies a flat 4.5% state income tax rate to gross winnings, meaning the full amount you win before any consideration of what you lost.
The Deduction Rule That Catches Many Bettors Off Guard
Here is where North Carolina stands apart from federal tax rules: the state does not allow bettors to deduct gambling losses from their state return. While federal tax law permits itemized deductions for gambling losses up to the amount of winnings, North Carolina decouples from that provision entirely.
In practice, that means you could win $9,000 and lose $9,000 over the course of a year, finish with nothing in your pocket, and still owe the state income tax on the $9,000 in gross winnings. The math works out to $405 in state taxes on a year where you broke even.
The State Can Now See Your Betting Account
Senate Bill 595 also gives North Carolina's Department of Revenue direct access to bettor account data from sportsbook operators. If you had $2,000 or more in gross winnings from a single NC betting app, the state can now verify whether you reported it on your taxes, including retroactively for last year.
Previously, compliance relied largely on bettors self-reporting. That is no longer the case. The NC Department of Revenue will now know what you won and cross-reference that against what you filed. It is an enforcement measure, not a rate change, but for bettors who have not been reporting winnings, the impact could be significant.
Get the Best Sports Betting Offers Here
