North Carolina Passes SB 595 Sportsbook Tax Increase

Jonathan Rodriguez

Written by: Jonathan Rodriguez

Published: Wed Jun 24, 2026, 8:00 am ET

Read Time: 4 minutes

North Carolina Passes SB 595 Sportsbook Tax Increase

industry

North Carolina lawmakers have moved forward with a sweeping tax reform package that includes significant changes for the state's sports betting industry.

The North Carolina Senate recently passed the conference committee version of Senate Bill 595, a broad tax measure that addresses several areas of state revenue policy. Among its most notable provisions is an increase in the tax rate applied to licensed sportsbooks operating in the state.

The legislation arrives as North Carolina gambling continues to generate strong revenues following the launch of legal online sports betting in March 2024. Lawmakers say the changes will help the state capture additional revenue while maintaining a competitive market for operators.

However, industry stakeholders remain divided over the proposal, particularly regarding its impact on operators and bettors. The measure now heads toward the governor's desk after lawmakers reached a final compromise on the legislation.

SB 595 Includes Multiple Tax Changes Across North Carolina

SB 595 was introduced by Senators Tom McInnis and David Craven as part of a broader effort to revise North Carolina's tax framework.

The bill contains several tax-related provisions affecting individuals and businesses. However, the proposed changes to sports betting taxation have generated the most attention from the gaming industry.

Lawmakers spent weeks negotiating the final language. Earlier budget discussions included proposals for steeper increases to sportsbook taxes. Ultimately, legislators settled on a smaller increase through SB 595.

Sportsbook Tax Rate Increase and New Reporting Requirements

Under SB 595, the tax rate for licensed online sportsbooks would increase from 18% to 23% of gross wagering revenue.

The measure represents a five-percentage-point increase over the current rate. If enacted, North Carolina would join a growing list of states that have revisited sports betting taxes after seeing strong market performance.

The bill also introduces new reporting requirements for bettors. Sports betting operators would be required to report customers who receive federal gambling tax forms for winnings exceeding $2,000.

Supporters say the reporting provision will improve compliance with existing tax laws. Meanwhile, critics argue that additional reporting requirements could create new administrative burdens for operators.

The final 23% tax rate places North Carolina above several established sports betting markets. New Jersey currently taxes sports betting revenue at 19.75%, while Massachusetts and Ohio both impose 20% rates.

By comparison, Pennsylvania taxes sports betting revenue at 36%. Illinois uses a progressive structure that ranges from 20% to 40% depending on operator revenue.

Several states maintain even higher rates. Sports betting operators in New York, New Hampshire, and Rhode Island share 51% of their revenue with those states. Delaware applies a 50% rate.

House Speaker Destin Hall previously indicated that lawmakers were considering how North Carolina's tax policies compare with those in other jurisdictions.

"I think, on our side of the building, it's more so looking at, 'How do we line up with other states?' We want to be on the average of what other states are doing on a lot of these rates," House Speaker Destin Hall told news outlets earlier this month. 

"A lot of the ideas are out there. I think we're somewhat hesitant to tweak too much a program that's worked pretty well for the state, all things considered."

The final compromise reflects that approach. Rather than pursuing one of the nation's highest tax rates, lawmakers opted for a more moderate increase.

Industry Response Remains Mixed

The proposed tax increase has generated mixed reactions across the industry.

Some stakeholders argue that higher taxes could reduce promotional spending and limit the ability of operators to offer competitive odds. Others warn that increasing operating costs may affect long-term investment in regulated markets.

At the same time, some observers view the compromise as less disruptive than earlier proposals discussed during budget negotiations. The final rate remains well below the highest sports betting tax structures currently in place across the United States.

The debate is particularly important for US online sportsbooks, many of which operate across numerous regulated jurisdictions and must adapt to varying tax frameworks.

As more states evaluate sports betting revenues, operators continue monitoring legislative developments that could affect profitability and market expansion.

What Happens Next for SB 595?

SB 595 has cleared a major legislative hurdle after the North Carolina Senate voted 27-18 to approve the final conference committee version of the bill.

The vote came after House and Senate leaders reached a compromise on the legislation's various tax provisions, including the sportsbook tax increase. As a result, the measure no longer requires additional chamber-to-chamber negotiations.

The bill is now positioned to move through the final procedural steps before reaching Governor Josh Stein's desk.

If the governor signs the legislation, the sportsbook tax will increase from 18% to 23% and the new gambling winnings reporting requirements would become part of North Carolina's regulatory framework.

The measure would mark another significant development for North Carolina gambling, less than three years after the state launched its regulated online sports betting market.

For US online sportsbooks operating in the state, the governor's decision will determine whether operators face higher tax obligations under the new framework established by SB 595.

Jonathan Rodriguez
Jonathan Rodriguez

Jonathan is an avid basketball fan, and is often looking forward to the next upcoming NBA season when not checking players' stats during games. He also likes to keep his ears on the ground for the latest rumblings in the online casino industry.

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