- Legislators in North Carolina passed a bill requiring sports betting operators to supply information on players with over $2,000 in winnings in a year for tax reporting purposes.
- Sports betting winnings have primarily been on the user to report, but this unprecedented rule puts the power in the state’s hands.
RALEIGH, N.C. – A new tax bill in the state of North Carolina is tightening up reporting on sports betting winnings.
On Wednesday, the North Carolina Department of Revenue passed Senate Bill 595, which allows the state to request information from operators about sports betting users in the state to increase tax reporting compliance, including:
- Name, Social Security number, and address
- Wagering history
- Money wagered, won, and lost
- Other relevant data
Sports betting sites in North Carolina would be required to provide this information for any players in the state who win $2,000 or more in a fiscal year, while it would have to be requested for any other user under that threshold.
This is an unprecedented move for any state and is an effort made by the state to collect tax dollars that may not have been reported in the past. Many bettors do not often report their winnings for tax purposes because it is uncommon for sport betting operators to issue W-2G forms to users, allowing for users to move on with their winnings without reporting them.
Many are upset with the move because of the current tax laws for sports betting in North Carolina, which applies a flat 4.25% tax rate on sports betting winnings, along with a federal income tax that can range from 10-37% while allowing for minimal deductions on losses. Losses cannot be deducted against winnings and are capped at 90% on the federal return.
While the state certainly sees this as a positive development, it could lead to users abandoning legal sports betting sites in favor of prediction markets, which have grown immensely in popularity in recent years and do not follow the same tax laws.
TLDR: If you bet on sports in North Carolina, the state government wants 4% of your winning wagers with no deductibility of losing wagers.
The operators will be required to send them your betting records.
A $50 bettor who makes 20 wagers a week will LOSE $2600 a year and STILL… https://t.co/LYZQEc45UE— Captain Jack Andrews (@capjack2000) June 24, 2026
Other states could follow suit depending on the success of the new laws. However, if it backfires on the state, there is also a chance that it could be repealed down the line.
