North Carolina Eyes Higher Sports Betting Tax

A Budget Shake-Up

The hike would rank the state among the nation’s highest, matching Pennsylvania’s 36% and trailing only New York, New Hampshire, Delaware, and Rhode Island. Expected to pass the Senate this week, the plan heads next to the House, with operators like BetMGM and FanDuel staying mum so far.

The proposal’s a cash grab, pegged to add $53.4 million in fiscal year 2025-26 and $79.8 million in 2026-27. Senate leader Phil Berger backs it to spread betting revenue wider, especially to the University of North Carolina (UNC) system’s 13 schools.

It’s about more campuses benefiting. He eyes the state’s $2.4 billion betting handle last year. With a possible budget deficit looming, the extra funds could steady North Carolina’s books.

Rewiring College Sports Funds

The budget rewrites how betting taxes flow to colleges. Currently, 13 UNC schools split a flat $300,000 each, then divvy up 20% of what’s left. The new plan boosts their base to $500,000-$1.5 million: Appalachian State gets $1.5 million, Elizabeth City State $500,000.

After that, the same schools share 20%, while UNC, NC State, and the Major Events Fund each snag 10%. The rest hits the General Fund.

UNC and NC State, newly added to the payout list, could rake in $55.4 million over two years: $24.4 million in 2025-26, $31 million in 2026-27. It’s a lifeline as both schools pump millions into athletics—UNC’s hiring Bill Belichick and NC State’s Will Wade signal big spending.

But there’s a catch: their men’s and women’s basketball teams must play more in-state games against UNC system schools, hitting three games per Division II school and two per Division I by 2039-40, with at least one away.

Why the Push

The tax hike’s driven by need. North Carolina’s eyeing $80 million more yearly to offset rising costs. Sports programs, especially at UNC and NC State, face ballooning budgets, with revenue-sharing for athletes looming. They need new income streams.

The state’s $1 billion education fund, partly tied to betting, hungers for more, and a 36% tax could deliver.

Berger’s plan also weaves in local wins. Requiring UNC and NC State to play smaller UNC schools spreads economic perks, like $5 million in game-day revenue for host towns.

It’s a nod to fairness, ensuring betting taxes don’t just pad big-name programs. Other ideas, like National Guard tax breaks or gambling addiction services, lost out, but the college focus holds firm.

The Senate’s set to greenlight the budget, sending it to the House. If it clears, the 36% tax kicks in October 1, joining Pennsylvania’s high-tax club but shy of New York’s 51%.