North Carolina explores potential tax revenue from online betting

Sports betting is already legal in North Carolina, but legislators have an ambitious plan to scale the experience and bring it online. With the session only starting in May and running through the end of June, they have limited time to do this. A bill voted and approved by the Senate, SB 688, is now heading for the House of Representatives where it is expected to get even more support.

Yet, one question lingers – how much annual tax North Carolina can collect by leveraging online sports gambling. At the dawn of sports betting in the United States or back in 2018, legislators mistakenly interpreted the handle as the taxable amount. They were wrong. Fast-forward to 2022 and people have learned their lesson.

Regardless, North Carolina still estimates that tax can be helpful – even though it won’t solve the state’s budget deficits. An estimated $20 million in annual tax revenue should be coming into the budget if online gambling is brought online. Rep. Jason Saine, who is one of the bill’s main backers in the House of Representatives is confident that the state should be taking a fair share of the revenue as well.

It's not just representatives and senators who are behind the proposal though. State governor Roy Cooper seems to be similarly interested in pushing the bill forward. Cooper is optimistic about the future of the bill and online betting in North Carolina. It’s a positive thing, the governor argues, adding that the state taxpayers will be helped by the revenue that is generated through the taxation – and expansion – of online gambling.

Apart from taxing revenue, though, there are other factors to take into consideration. While the 8% tax on the adjusted gross revenue – that is the money held by operators after paying out winning wagers – is not that much, there is also a $500,000 application fee. With 12 online licenses to be introduced and no shortage of takers, North Carolina can see an immediate $6 million extra in its coffers.

It's not just that, as legislators want to have a renewal fee that will be paid annually. Before an average of $20 million in tax can be reached though, the industry would need to set itself up. Lawmakers have been cautiously optimistic about the tax prospects for North Carolina, from anything between $8 million to $24 million. While legislators are tinkering with the bill, North Carolina is likely to have sports betting online in time for the next NFL season or – at the very least – in time for the next Super Bowl.

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