North Carolina Lawmakers Propose Bill to Allow Tax Deductions for Gambling Losses
A new bill in the North Carolina House of Representatives could change how sports bettors handle their taxes. House Bill 14 (HB 14) aims to let residents deduct gambling losses from their taxable income, a policy already in place at the federal level and in many other states with legal sports betting. Right now, North Carolina bettors must pay state taxes on their winnings, even if they lost more money overall.

What House Bill 14 Proposes
If passed, HB 14 would allow sports bettors in North Carolina to offset their gambling losses against their winningswhen filing state income taxes. Currently, residents must pay taxes on their winnings regardless of whether they lost more than they won throughout the year.
The bill includes several key provisions:
- Only itemized deductions would qualify – Bettors using the standard deduction would not be eligible.
- Losses cannot exceed winnings – A bettor can only deduct up to the total amount won, preventing excessive deductions.
- Retroactive application to 2024 – The rule would apply starting from the 2024 tax year, aligning with the legalization of online sports betting in the state.
Why Supporters Say the Bill is Fair
Backers of HB 14 argue that the bill fixes an unfair tax rule. In most states with legal sports betting, bettors can deduct losses from winnings when filing taxes. North Carolina, however, doesn’t allow this, meaning bettors may owe taxes even if they lost more than they won.
Supporters believe this rule penalizes players unfairly and that the bill would bring state tax laws in line with national standards.
The bill’s sponsors, Representatives Erin Pare, Steve Tyson, Keith Kidwell, and Matthew Winslow, say the change is about treating gambling income fairly.
Under current laws, a bettor could lose thousands of dollars but still owe state taxes on any winnings, which doesn’t reflect their actual financial outcome.
They argue that no other form of income is taxed this way, making gambling an exception that needs to be corrected.
Why Some Lawmakers Oppose the Bill
Not everyone supports the proposed changes. Some lawmakers worry that allowing gambling loss deductions could cut state tax revenue at a time when North Carolina is managing economic uncertainties.
House Speaker Destin Hall has called for a closer look at the bill’s financial impact, saying lawmakers need to consider how it could affect overall tax collections.
Senate leader Phil Berger has previously rejected similar proposals, making it unclear whether HB 14 has enough support to pass.
Critics also argue that giving tax breaks tied to gambling could encourage more betting, leading to long-term financial issues for some residents. While supporters see it as a fair adjustment, opponents believe it could normalize gambling-related deductions, setting the stage for more industry-friendly tax breaks in the future.
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