NC SB 257 Signed: Sports Betting Taxes Rise

Jonathan Rodriguez

Written by: Jonathan Rodriguez

Published: Wed Jul 08, 2026, 7:00 am ET

Read Time: 4 minutes

NC SB 257 Signed: Sports Betting Taxes Rise

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Governor Josh Stein has officially signed North Carolina's Senate Bill 257 (SB 257). This budget bill introduces significant changes to the state's gambling tax framework. 

The legislation raises the tax rate for licensed sportsbooks while establishing a new tax on federally regulated prediction markets. Together, the measures mark one of the state's most consequential North Carolina gambling policy updates since legal online sports betting launched in 2024.

Lawmakers approved the budget after weeks of negotiations over education funding, public safety spending, and tax policy. 

Although the budget primarily focuses on state appropriations, it also reshapes gambling taxation by increasing contributions from US online sportsbooks and creating a separate tax structure for prediction market operators.

The sportsbook tax increase takes effect under the budget's implementation schedule, while the new prediction market tax becomes effective on January 1, 2027.

SB 257 Raises Sports Betting Taxes Across North Carolina

SB 257 increases North Carolina's tax on licensed online sports betting operators from 18% to 23% of gross wagering revenue. Legislators had previously considered a much higher 36% rate before settling on the lower figure during budget negotiations.

The revised rate is expected to generate additional revenue for statewide programs while preserving a competitive market for licensed operators. Since launching legal online sports betting in March 2024, North Carolina has collected hundreds of millions of dollars in sportsbook tax revenue.

The legislation also continues directing sports betting proceeds toward education, athletic programs, and responsible gambling initiatives. Those allocations remain an important component of the state's broader funding strategy.

Governor Stein highlighted the budget's investments in teachers, law enforcement, and essential public services after signing the measure. While his announcement focused on the broader spending package, the gambling provisions immediately became part of North Carolina law.

North Carolina Will Tax Prediction Markets Without Licensing Them

SB 257 also establishes North Carolina's approach to federally regulated prediction markets. Rather than requiring operators to obtain a state gambling license, lawmakers chose to recognize federal oversight while imposing a state tax.

Beginning January 1, 2027, prediction market operators registered with the Commodity Futures Trading Commission (CFTC) will pay a 6% tax on net trading fee revenue generated in North Carolina.

The decision distinguishes prediction markets from traditional sportsbooks. Licensed sportsbooks must continue complying with North Carolina's gaming regulations, while prediction market platforms remain regulated at the federal level.

Supporters argued that the framework allows the state to capture tax revenue without creating overlapping regulatory requirements. Critics, however, questioned whether the lower tax rate could encourage consumers to migrate from sportsbooks to prediction market platforms.

The measure also places North Carolina among the first states to formally acknowledge federally regulated prediction markets in state tax law rather than pursuing enforcement actions against them.

UNC Chapel Hill and NC State Remain Key Beneficiaries

SB 257 preserves funding streams that benefit several public universities through sports betting tax revenue. Among the most notable recipients are the University of North Carolina at Chapel Hill (UNC Chapel Hill) and North Carolina State University.

UNC Chapel Hill is the state's flagship public university and one of the nation's leading research institutions. The university consistently competes at the highest level of collegiate athletics, particularly in basketball, soccer, and women's sports. Sports betting tax revenue helps support athletic initiatives and related educational programs established under North Carolina law.

North Carolina State University also continues benefiting from sports betting proceeds. Located in Raleigh, NC State is recognized for its engineering, agriculture, and research programs while maintaining a strong athletic tradition in the Atlantic Coast Conference. 

Additional funding can strengthen athletic opportunities and university initiatives tied to the state's revenue distribution model.

By maintaining these allocations, lawmakers reinforced their commitment to supporting higher education alongside athletic development. 

The funding structure reflects the legislature's goal of ensuring that legalized sports betting delivers measurable public benefits beyond general state revenue.

NC Setting Up Its Gambling Regulations

With SB 257 now signed into law, North Carolina has expanded its gambling tax framework. The state also charts a distinct course for prediction markets. 

The legislation increases contributions from US online sportsbooks, and introduces a new tax on federally regulated event contracts. SB 257 also continues directing gaming revenue toward universities and statewide priorities. 

As other states debate similar measures, North Carolina's approach could become an influential model for future North Carolina gambling legislation.

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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