By TheNuts - May 01, 2025
Sports Betting Tax Rates Set To Increase
North Carolina has joined the increasing list of states mulling significant tax increases on
sports betting revenue. Under newly proposed legislation (SB 257), the Tar Heel State's tax rate would increase from 18% to 36%, possibly changing market economics for operators.
Since allowing sports betting last year, North Carolina has collected nearly $135 million in tax revenue, averaging $10.4 million each month. The proposed increase would dramatically boost these figures, consistent with a national trend of states demanding bigger shares of the sports betting pie.
Tax hike momentum extends beyond North Carolina. Illinois recently implemented a progressive tax framework that charges rates of up to 40% on high-income operators with more than $200 million in monthly sales, with a minimum 20% rate based on a sliding scale. Massachusetts legislators are exploring an even more dramatic rise, with a plan that would raise the state's tax rate from 20% to 51%, tying it with New York and New Hampshire for the highest rate in the country.
Maryland and New Jersey are also considering similar tax increases under pending legislation, indicating a larger shift in how states approach sports betting taxation.
North Carolina's proposal includes an interesting earmark: 10% of revenue (about $24.4 million) would be paid to the athletic departments of the state's two largest public colleges, UNC and NC State. This grant is intended to help these universities implement suggested revenue-sharing plans for Division I student-athletes. If authorized, the tax increase will take effect on October 1.
Meanwhile, Alberta's sports betting market is getting closer to reality, as legislation prepared by Minister Dale Nally passed its second reading on Wednesday. The iGaming Alberta Act builds on Ontario's successful structure, however it has been delayed several times, despite initial plans to debut in 2024.
The bill is now sent to the Committee of the Whole for additional consideration and possible modifications. According to market experts at JMP Securities, an Alberta online gambling market could generate up to $700 million in yearly income, representing a major opportunity in a province home to the NHL's Edmonton Oilers, who are now favored to win the Stanley Cup at +950 odds.
These legal developments in several jurisdictions reflect the changing character of sports betting markets as they evolve. As operators respond to rising tax costs, bettors may face additional restrictions and potentially changing odds. For states, they are attempts to strike a balance between revenue creation and responsible gambling protections.
As these proposals progress through their individual legislative processes, industry stakeholders and bettors will be watching intently to see how the North American sports betting ecosystem evolves in reaction to regulatory demands.